IRPC: Annual Report 2017 by orapan shareinvestor

CONTENTS

Message from the Chairman Key Performance Financial Highlights Vision Mission Values Milestones Awards of Success 2017

02 04 05 06 12 14

Organization Structure Management Team Internal Control Risk Management Committee Report of the Audit Committee Message from the Chairman, Nomination

Performance Summary EVEREST Project Management Discussion and Analysis

20 34 35 47 50 52 54

CORPORATE RESPONSIBILITY Corporate Social Responsibilities Quality, Safety Occupational Health Sustainable Management Structure

Corporate Governance Report

Thai Listed Campanies (CGR) 2017

Compliance with Corporate Social

MANAGEMENT STRUCTURE

Responsibilities

80 110

BUSINESS STRUCTURE Business Structure and Shareholding Nature of Business Integrated Refinery and Petrochemical

116 117 120

Complex Flow Chart Products Market Overview and Industry Outlook Nature of Business Operation Connected Transaction

213

55 Corporate Governance Report of

IRPC Information

186 205

and Environmental Management (QSHE)

Corporate Governance Committee

Management Structure

144 146 166 168 171

APPENDIX

and Remuneration Committee Message from the Chairman,

Message from the President

Human Resource Administration

BOARD RESPONSIBILITY Board of Directors

PERFORMANCE SUMMARY & MANAGEMENT ANALYSIS

122 128 138 139

216 238

2017 Annual Report IRPC Public Company Limited

Message from the Chairman

Dear Shareholders, The Board of IRPC Public Company Limited has specified its vision to move IRPC to become â&#x20AC;&#x153;the Leading Integrated Petrochemical Complex in Asia by 2020.â&#x20AC;? The Board has also defined both short-term and long-term strategic plan to ensure that the organization will move to the established direction and plan and ultimately achieve its goals and objectives within time specified.

Last year marked another year of success for IRPC. IRPC’s business performance has continuously improved. In 2017, EBITDA was recorded at 20,420 million baht with the net profit of 11,354 million baht, an increase of 17 percent from 9,721 million baht in 2016. Such success is the result of the Everest Project, a project based on a strategic plan to improve performance efficiency, manufacturing procedure, organizational management as well as fostering corporate value and culture while simultaneously developing the organization to be in the Top Quartile. To achieve this objective, the cooperation of employees of entire organization together with consultants from the leading companies worldwide is needed. Such project started since 2015 and

ended in 2017 and incurred the profit of approximately 7,000 million baht in which IRPC plans to further its growth by introducing new strategic plan under the name “GDP”. IRPC; therefore, will be equipped with strength, readiness and accurate prediction, rendering the company with more efficient business management and in conformity to directions specified by the Board. Apart from creating added value to its business, The Board of IRPC also perform its duty as specified in the new CG Code, revise, develop and improve the performance by emphasizing on the notion of “Board that makes a difference”. The Board has constantly valued the internal control, risk management, anti-corruption policy and bribery while stressing on the highest benefits of every group of shareholders and stakeholders on a fair and equitable basis and strives to foster their confidence to maintain the

organization’s image and reputation regarding transparency to ultimately become the good corporate citizen that is accepted and recognized by both domestic and international institutions. IRCP has been awarded with NACC Integrity Award 2017, presented by the Office of the National AntiCorruption Commission for two consecutive years. In addition, the Board has realized the importance of business operation with responsibility towards society, environment and community as indicated in the company’s philosophy on creating balance between economy, society and environment; thus, in 2017, IRPC had been recertified its membership of DJSI (Dow Jones Sustainability Indices) in oil and gas category for four consecutive years. The Board has realized that an overall achievement in 2017 was a cooperation of every related party, especially the management and employees of IRPC and its subsidiaries who consistently dedicated their best effort and ability in leading the organization toward better goals in the future. On behalf of the Board of Directors, I would like to express my sincere gratitude to every stakeholder who have a strong faith and always provide us with considerable support. I would like to confirm that all of us at IRPC will continue to adhere to our vision and mission to render every shareholder with the highest benefits while striving to create value for business and society for sustainable growth and development.

Mr.Tevin Vongvanich Chairman

2017 Annual Report IRPC Public Company Limited

KEY PERFORMANCE NET SALES

SALES DISTRIBUTION

PETROLEUM PRODUCTS

PETROCHEMICAL PRODUCTS (UNIT: MILLION BAHT)

197,594

PETROLEUM PRODUCTS PETROCHEMICAL PRODUCTS

197,594

68%

DOMESTIC EXPORT

30%

59,728

57%

DIESEL

58%

43%

GASOLINE

11% 3%

FUEL OIL

OTHERS

135,125

NET SALES

LUBE BASE OIL AND ASPHALT

12%

OTHERS

16%

NET PROFIT

59%

AROMATICS

29%

STYRENICS

11%

POLYOL

UNIT: MILLION BAHT

UNIT: MILLION BAHT 300,000

OLEFINS AND POLYOLEFINS

15,000

11,354 200,000

199,595

168,349

197,594

10,000

100,000

5,000

0 2015

TOTAL ASSETS

2016

UNIT: MILLION BAHT

200,000 150,000

163,174

2017

172,378

184,544

9,721

2015

2016

TOTAL LIABILITIES

2017

UNIT: MILLION BAHT

200,000 150,000

100,000

50,000

0 2015

9,402

2016

2017

87,296

91,373

2015

2016

96,894

2017

Financial Highlights 2015

2016

2017

35,984 163,174 36,210 87,296 75,878 20,475 20,434

39,848 172,378 52,429 91,373 81,005 20,475 20,434

47,583 184,544 49,365 96,894 87,650 20,475 20,434

214,172 199,595 197,913 16,258 17,033 9,402

185,041 168,349 164,900 20,140 17,430 9,721

214,101 197,594 192,946 21,155 20,420 11,354

7.95% 4.39% 5.77% 13.09% 0.99 0.66 48% 0.22 3.71 0.46

9.42% 5.25% 5.79% 12.41% 0.76 0.75 48% 0.23 3.96 0.48

9.54% 5.30% 6.36% 13.48% 0.96 0.65 52% (5) 0.29 4.28 0.56

Financial Position Current Assets Total Assets Current Liabilities Total Liabilities Shareholder's Equity Registered Capital Paid-up Capital

Operating Performance Sales(1) Net Sales(2) Cost of Goods Sold Gross Profit (Loss) EBITDA(3) Net Profit (Loss)

Financial Ratio EBITDA Margin Net Profit Margin Return on Assets Return on Equity Current Ratio (time) Net Debt to Equity (time)(4) Dividend Payout Dividend per Share (baht) Book Value per Share (baht) Earning per Share (baht)

Notes: (1) Sales includes Petroleum Sales, Petrochemical Sales, Power and Utilities Sales, Sales of storage tank and port service, etc (2) Net Sales includes Petroleum Sales (excluding excise tax), Petrochemical Sales, Power and Utilities Sales (3) EBITDA means Earnings before interest, taxes, depreciation and amortization (4) Net Debt means interest bearing debt less cash and short-term investments (5) The Board of Directors of the Companyâ&#x20AC;&#x2122;s meeting on 13 February 2018, approved to propose a dividend payment for the operating results of 2017 at Baht 0.29 per share. However, the approval shall be proposed to the Annual Sharehoders' Meeting for the year 2018 for the further consideration and approval.

BASECAMP (17,500 ft)

2016

CAMP 1 (19,500 ft)

EVEREST FOREVER (E4E)

EVEREST FOREVER

2020

EBITDA 29,029 MTHB

2019

HEIGHT 29,029 ft

2018 CAMP 4 (26,300 ft)

2017 CAMP 3 (23,500 ft)

CAMP 2 (21,000 ft)

Armed with the “Leading Integrated Petrochemical Complex in Asia by 2020” vision, it is with determination that IRPC pursues growth. Leveraging EVEREST best practices, it forged management continuity under the “EVEREST Forever (E4E) Project” while expanding investment, growing capacities, tackling ASEAN markets, nurturing ties with business partners, and innovating high-value products.

IRPC

4.0

CUSTOMER CENTRIC DIGITAL PLATFORM DIGITAL INTEGRATED SUPPLY CHAIN

SMART OPERATION

ERP TRANSFORMATION

IRPC

4.0

Striding into a futuristic era, IRPC executes a digital strategic plan under the “IRPC 4.0 Project” to apply state-of-the-art digital systems and technologies involving employees, business partners, and customers. Going forward, it’s all about streamlined and digitized operating processes, razor-sharp analysis, and more efficient production and services.

IRPC

DNA

INDIVIDUAL OWNERSHIP

RESULTORIENTED

CONTINUOUS IMPROVEMENT PROMISE AND DELIVER

NO BIAS

DO THINGS TOGETHER

ACTIVELY SOLVE THE PROBLEM

IRPC DNA-the corporate culture platform for “a new behavior, a new mindset” conducive to IRPC’s envisioned growth-accompanies refined HR administration, a resilient structure, recruitment of talented staff, inspired leadership, and instilling of new corporate values.

2017 Annual Report IRPC Public Company Limited

Milestones

January February

1 • IRPC joined the opening ceremony with the Federal of Thai Industries and signed the

cooperative agreement of the project in expanding the promotion of carbon footprint production of industrial organizations in its 6th stage. • Fitch Ratings (Thailand) raised IRPC’s outlook from negative to stable while maintaining its credit rating at ‘A-(tha)’. • IRPC underwent its planned major turnaround. (every 5-6 years)

March

2 • IRPC signed the steam purchase contract with UBE Chemicals (Asia) Public Company

June

3 • Re-certification of CAC: Thailand’s Private Sector Collective Action Coalition Against

July

• IRPC-PCC Co., Ltd. (IRPC-PCC), was dissolved for organization restructuring of IRPC’s polyol business unit. This joint venture was equally held by IRPC Polyol Co., Ltd. (IRPC subsidiary), and PCC Rokita SA, Poland. • The Company, in collaboration with Department of Industrial Promotion, Ministry of Industry and private sector, have expressed their strong intention and commitment in supporting business operation for social enterprise in pursuant of sustainable development of the nation.

Limited and also signed the service contract concerning ammonia and cyclohexane storage tanks with UBE Chemicals (Asia) Public Company Limited and Thai Synthetic Rubbers Co., Ltd. •

Corruption and Technology IRPC Co., Ltd. had been certified as CAC’s member. IRPC has declared its intention and determination in moving forward its goals in pursuant of Sustainable Development Goals (SDGs) with Thailand Business Council for Sustainable Development, including its 39 membership organizations.

Milestones

August

4 • IRPC in collaboration with PTT Group established Sarn Palung Social Enterprise

September

5 • Polypropylene Expansion Project (PPE), increasing its capacity by 160 KTA with total

November

• IRPC Polyol Company Limited had been certified a membership of Collective Action Coalition Against Corruption or CAC.

December

• The Board approved divesture of an additional 25% of IRPC’s total paid-up capital in IRPC Polyol Co., Ltd., to PCC Rokita SA (PCCR), Poland, resulting in IRPC and PCCR holding 50:50. The share increased is designed to expand cooperation in the production, marketing, and sales of high value-added polyurethane products. 8 • The new polypropylene compound (PPC) plant using an in-line compounding system in its production process, obtained from Japan Polypropylene Corporation, increasing its capacity by 140 KTA, and started its commercial production in December 2017 with a total capacity of 775 KTA.

Co., Ltd., to raise the level of support for CSR to the social enterprise of PTT Group. The Company had a registered capital of Baht 10 million, with IRPC holding 15%. capacity of 635 KTA, started up its commercial production in September 2017. • IRPC retained its membership of Dow Jones Sustainability Indices (DSI) for Oil and Gas Refining and Marketing Industry 2017 for 4 consecutive years and was ranked in a silver class by RobecoSAM yearbook. 6 • IRPC, in cooperation with the Global Compact Network Thailand (GCNT), participated in the National Agenda Announcement Program: Human right and moving the economy forward within the innovation framework of Thailand 4.0 7 • IRPC cooperated with Bank of Ayudhya Public Company (Limited), introduced Krungsri Blockchain’s Interledger to be employed in real-time international money transfer for the first time in the purchase-selling of oil between IRPC and its foreign trading partners.

2017 Annual Report IRPC Public Company Limited

Awards of Success 2017

Investor Relations

The Ultimate Popular Stock Awards In Resources category, from the decision of 4,000 investors based on Yamane evaluation criteria, the international criteria accepted worldwide. Such criteria consist of liquidity, regular information disclosure, executives’ outstanding innovation and movement of stock price in response to the Company’s growth. • Asia’s Best CEO (Investor Relations), Asia’s Best CFO (Investor Relations), and Best Investor Relations Company for the fourth consecutive year, presented by Corporate Governance Asia Magazine, reflecting efficient capability of investor relations. • Thailand Sustainability Investment (2017), presented by SET.

SET Awards 2017 Best Investor Relations Awards, presented by SET and Money & Banking Magazine. • “The Best FX Solutions Thailand” from the Asset Asian Awards 2017, hosted by “The Asset Triple A”, a leading magazine on financial and investment markets in Asia.

Awards of Success 2017

CSR and the Environment

• Golden Peacock Global Awards for Corporate Social Responsibility, presented by Institute of Directors (IOD), India. • IRPC was ranked among the 100 listed companies with outstanding Environment, Social and Governance (ESG) performance for three consecutive years. • CSR Winners 2017 “Top Campaigns in the CSR & Nonprofit Sector 2017” from PR News USA.

SET Sustainability Awards 2017

presented by SET.

• Asia Responsible Entrepreneurship Awards 2017, in Investment in People category (IRPC Cubic Academy) from Enterprise Asia, an independent organization promoting organizations’ CSR and sustainability in Asia Pacific. • Sustainability Report Awards 2017: Excellent Level, presented by SET for 5 consecutive years.

Corporate Governance

NACC Integrity Awards 2017 An honorary reward in recognition of morality, ethics, integrity from the Office of the National Anti-Corruption Commission (NACC) for 2 consecutive years. • The Best Corporate in Asia 2017 Award in the category of Asia’s Outstanding Company on Corporate Governance from Corporate Governance Asia Magazine. • Golden Peacock Global Award for Excellence in Corporate Governance 2017, presented by Institute of Directors (IOD), India, in recognition of its outstanding corporate governance policies for 5 consecutive years.

• 2017 Certificate for CSR and occupational promotion of the disabled, presented by the Ministry of Labour.

2017 Annual Report IRPC Public Company Limited

Energy and Industry

Thailand Energy Awards 2017 In the category of Outstanding Personality: teamwork in energy management of the controlled plant and an outstanding award in energy accountability of the controlled plant, presented by the Department of Alternative Energy Development and Efficiency, Ministry of Energy, which represents the admiration and respect towards the plant, personnel including every supporting entity that encourage energy conservation and the development of alternative energy with an outstanding performance. Such plant is considered a good example for various organizations of its participation of employees of every level.

Eco Factory Awards Presented to 9 plants, namely EPS plant, PTK Catalyst plant, water supply plant, wastewater treatment plants 1 and 2, wastewater treatment plant 3, Catalyst HA1 plant, ABS plant, CCM plant and ethyl benzene styrene monomer plant, all presented by the Industrial Environmental Institute, Federation of Thai Industries.

Zero Accident Campaign 2017 Awards in a national level and plaque of honour from the campaign “Minimize workplace accident to zero”, Silver Award Level for the first time after being awarded with the Bronze Award Level for 4 consecutive years, presented by Thailand Institute of Occupational Safety and Health. • Thailand Quality Prize 2017 Award, Diamond Award Level, in the category of Task Achieving QCC Prize from work achievement called “the control of hydrocarbon emission at the fare due to crake gas compressor shut down. Silver Award Level in the category of Junior Manufacturing QCC Prize from work achievement called “the reduction of product AB quantity from the production system of Bagging Machine Line 4”, presented by the Ministry of Industry. • First Prize Winner of Best Practice Sharing Award from PTT Group Operational Excellence Award 2017, representing the Company’s constant support and promotion on efficiency improvement of the plant, exchange of body of knowledge in terms of technique, method and work experience as well as further the knowledge, applied

operation to enhance efficiency, minimize or increase expenditures by compiling them as a body of knowledge which is deemed significant in leading the Company to become organization of excellence. • “Pleasant, enjoyable, clean, safe, environmentally friendly and lively workplace” Award 2017, very good level and “Disease-free, safe and pleasant environment workplace” Award 2017, excellent level for IRPC’s Phra Padaeng Oil Terminal, presented by the Ministry of Public Health. • National Outstanding Workplace for Safety, Occupational Health and Work Environment Award 2017, presented by the Department of Labour Protection and Welfare.

Awards of Success 2017

The Prime Minister’s Industry Awards 2017 With 3 awards in total representing that the Company has implemented an efficient management while taking into account worthwhile resource allocation with highest benefits. - Olefins Plant for Outstanding Industry Award. Category: Productivity. - Base Lube Oil Plant for Outstanding Industry Award. Category: Energy Management, all awards were presented by the Ministry of Industry. • Outstanding Prototype Workplace Award: Diamond Level, presented to IRPC’s Ayutthaya Oil Terminal for 5 consecutive years. • Outstanding Administrative Personality Award and Outstanding Supervisor Award: National Level

• Green Industry 4 (GI 14) Award, presented to 15 plants, namely Ban Khai Water Filtering Plant, refinery, condensate residue plant, combined gas oil plant, base oil plant, ethylene plant, propylene plant, acetylene black plant, cogeneration plant, benzyne/ toluene/xylene plant, polystyrene plant, compound polymer plant, polypropylene plant, high-density polyethylene compound plant, polyol plant, all presented by the Ministry of Industry.

Innovation

Best Innovative Company Awards Best Innovative Company Award for the work on Ultra High Molecular Weight Polyethylene (UHMWPE) in SET Awards 2017, hosted by SET and Money & Banking magazine.

Organizational Image

Thomson Reuters 2017 Top 100 Global Energy Leader The Company was selected by Thomson Reuters as, in recognition of its strong commitment and dedication on striving to become an energy leader and operational excellence in 8 criteria, namely, finance, investors and executives’ confidence, risk management and security enhancement, compliance with laws, innovation, people and social responsibility, management of environmental impact and the Company’s image.

2017 Annual Report IRPC Public Company Limited

VISION

MISSION

LEADING INTEGRATED PETROCHEMICAL COMPLEX IN ASIA BY 2020

OPERATIONAL EXCELLENCE HIGH PERFORMANCE ORGANIZATION CORPORATE SOCIAL RESPONSIBILITY VALUE CREATION INNOVATION & CREATION OF NEW BUSINESS

VALUES

I NDIVIDUAL OWNERSHIP S YNERGY P ERFORMANCE EXCELLENCE I NNOVATION R ESPONSIBILITY FOR SOCIETY I NTEGRITY & ETHICS T RUST & RESPECT

BOARD RESPONSIBILITY BOARDS OF DIRECTORS ORGANIZATION STRUCTURE MANAGEMENT TEAM INTERNAL CONTROL MESSAGE FROM THE CHAIRMAN, RISK MANAGEMENT COMMITTEE REPORT OF THE AUDIT COMMITTEE MESSAGE FROM THE CHAIRMAN, NOMINATION AND REMUNERATION COMMITTEE MESSAGE FROM THE CHAIRMAN, CORPORATE GOVERNANCE COMMITTEE CORPORATE GOVERNANCE REPORT

2017 Annual Report IRPC Public Company Limited

Boards of Directors

Standing : Mr. Kris Imsang

Director/ Member of Corporate Governance Committee

Mr. Jessada Promjart

Independent Director/ Member of Audit Committee

Seated : Mr. Anusorn Sangnimnuan Mr. Tevin Vongvanich Independent Director/ Chairman of Corporate Governance Committee

Chairman

Mr. Ekniti Nitithanprapas Director/ Member of Risk Management Committee

General Sasin Thongpakdee Miss Nantika Thangsuphanich Independent Director/ Member of Corporate Governance Committee

Director/ Member of Nomination and Remuneration Committee

Boards of Directors

Mr. Chansin Treenuchagron Director/ Member of Risk Management Committee

Mr. Woothisarn Tanchai Independent Director/ Chairman of Nomination and Remuneration Committee

Miss Ruenvadee Suwanmongkol

General Theppong Tippayachan

Mr. Sukrit Surabotsopon

Mr. Nuttachat Charuchinda

Independent Director/ Member of Audit Committee

Director/ Member of Risk Management Committee/ President/ Secretary of the Board of Directors

Independent Director/ Member of the Corporate Governance Committee

Director/ Chairman of Risk Management Committee

Mr. Somnuk Bomrungsalee Mr. Chavalit Punthong Independent Director/ Chairman of Audit Committee

Director/ Member of Nomination and Remuneration Committee

2017 Annual Report IRPC Public Company Limited

Boards of Directors, IRPC Public Company Limited Mr. Tevin Vongvanich Chairman/ A Director who is authorized to sign on behalf of the Company Age 59 Years Directorship Starting Date: 20 October 2015

Education/ Training

• B.E. Chemical Engineering (1st Class Honor), Chulalongkorn University, Thailand • M.Sc. Chemical Engineering, Rice University, USA • M.Sc. Petroleum Engineering, University of Houston, USA • Honorary Doctorate of Philosophy, Civil Engineering Department, Faculty of Industry and Technology, Rajamangala University of Technology Isan • Senior Executive Program (SEP), Class 7, Sasin Graduate Institute of Business Administration, Chulalongkorn University • Program for Global Leadership (PGL), Class 3, Harvard Business School, USA • Top Executives Program, Class 6, Capital Market Academy • The Joint State Private Sector Course, Class 22, National Defense College • The Executive Program in Energy Literacy for a Sustainable Future (TEA), Class 3, Thailand Energy Academy • Democratic Politics and Governance for High-Level Administrators Program, Class 10, King Prajadhipok’s Institute • Public Director Certification Program (PDI), Class 7, King Prajadhipok's Institute • Director Certification Program (DCP), Class 21/ 2002, Thai Institute of Directors (IOD) • Financial Statements for Directors (FSD), Class 6/ 2009, Thai Institute of Directors (IOD) • Role of the Compensation Committee (RCC), Class 13/ 2011, Thai Institute of Directors (IOD) • Anti-Corruption for Executive Program (ACEP), Class 15/ 2015, Thai Institute of Directors (IOD) • Ethical Leadership program (ELP), Class 7/2017, Thai Institute of Directors (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: 900 Share Possession: 0.00%

Family relationship within the Company, major shareholder of subsidiaries None

Work experience within the past 5 years Sep 2014 - Sep 2015 May 2012 - Sep 2015 Jan 2010 - Apr 2012 Apr 2010 - Apr 2012 Apr 2009 - Mar 2011

Current Position

Chairman, MCOT Public Company Limited President/ Chief Executive Officer, PTT Exploration and Production Public Company Limited Chief Financial Officer, PTT Public Company Limited Director, Thai Oil Public Company Limited Chairman, PTT ICT Solution Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Oct 2015 - Present Chairman, IRPC Public Company Limited Sep 2015 - Present President/ Chief Executive Officer, PTT Public Company Limited Sep 2015 - Present Director/ Secretary to the Board, PTT Public Company Limited Nov 2009 - Present Director, PTT Exploration and Production Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Aug 2017 – Present Director, Member of the Economic Reform Commission Jun 2016 – Present Honorary Board Member, The Public Sector Development Commission Jul 2015 - Present Honorary Board Member, National Science and Technology Development Agency Jul 2014 - Present Director to the Board of Trustee, Thailand Management Association (TMA) Nov 2014 - Present Chairman, Information and Public Communication Management Sub-committee, National Committee on Competitive Advantage (NCC), National Economic and Social Development Board (NESDB)

Boards of Directors

Mr. Nuttachat Charuchinda

Mr. Woothisarn Tanchai

Director/ Chairman of Risk Management Committee/ A Director who is authorized to sign on behalf of the Company

Independent Director/ Chairman of Nomination and Remuneration Committee

Age 62 Years Directorship Starting Date: 29 April 2016

Age 59 Years Directorship Starting Date: 19 June 2015

Education/ Training

• • • • • • • • •

Bachelor of Engineering, Chiang Mai University Master of Business Administration, Thammasat University Program for Global Leadership (PGL), Harvard Business School, USA Oxford Energy Seminar, UK Break Through Program for Senior Executives (BPSE), IMD Institute, Switzerland The Joint State-Private Course, Class 20, Thailand National Defence College Executive Program, Class 15, Capital Market Academy (CMA) Executive Program, Energy Education, Class 3, Thailand Energy Academy Director Certification Program (DCP), Class 129/ 2010, Thai Institute of Directors Association (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder of subsidiaries None

Work experience within the past 5 years May 2014 – Apr 2016 2013 - Apr 2016 2013 - Nov 2015 2013 - 2015 2011 - 2013 2010 - 2011

Current Position

Chairman PTT Energy Resources Company Limited Director, Thai Oil Public Company Limited Director, PTT Exploration and Production Public Company Limited Chief Operating Officer, Upstream Petroleum and Gas Business Group, PTT Public Company Limited Chief Operating Officer, Downstream Petroleum Business Group, PTT Public Company Limited Senior Executive Vice President, Corporate Strategy, PTT Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Apr 2016 – Present Director/ Chairman of Risk Management Committee, IRPC Public Company Limited Aug 2017 – Present Director, National Power Supply Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Dec 2017 – Present President, Ritta Holdings Company Limited Jul 2017 – Present President, Bangkok Mass Transit Authority

• • • • •

Bachelor of Science, Khon Kaen University Master of Public Administration, National Institute of Development Administration (NIDA) Master of Policy Science (M.P.S.), International Program, Saitama University, Japan Public Law Certificate, Faculty of Law, Thammasat University Public Director Certification Program (PDI), Class 1, King Prajadhipok's Institute

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder of subsidiaries None

Work experience within the past 5 years

Oct 2014 - Apr 2015 Apr 2013 - Apr 2015 2012 Apr 2009 - Apr 2015

Current Position

Member of Risk Management Committee, IRPC Public Company Limited Chairman of Nomination and Remuneration Committee, IRPC Public Company Limited Member of Audit Committee, IRPC Public Company Limited Independent Director, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Jun 2015 – Present Independent Director/ Chairman of Nomination and Remuneration Committee, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Sep 2017 – Present Director, Member of the Board of Directors of the Strategy for Balancing and Developing the Public Sector management System 2016 - Present Member, Thammasat University Council 2015 - Present Advisor, Constitution Drafting Committee 2015 Dec 2014 - Present Secretary General, King Prajadhipok's Institute 2011 - Present Member, the National Culture Commission 2011 - Present Sub-Committee, the Office of the Public Sector Development Commission (OPDC) 2011 - Present Sub-Committee, the National Anti-Corruption Commission (NACC) 2008 - Present Member, Nakhon Ratchasima Rajabhat University Council

2017 Annual Report IRPC Public Company Limited

Mr. Anusorn Sangnimnuan Independent Director/ Chairman of Corporate Governance Committee Age 63 Years Directorship Starting Date: 27 August 2016

Education/ Training • • • • • • • • • •

Ph.D. (Chemical Engineering), Monash University, Melbourne, Australia M.Eng. (Environmental Engineering), Asian Institute of Technology (AIT) B.Sc. (Chemical Engineering), Chulalongkorn University Diploma, The joint State-Private Sector Course, Class 20, National Defence College Leadership Program, Class 10, Capital Market Academy The Stock Exchange of Thailand Advanced Diploma, Public Administration and Public Law, Class 5, King Prajadhipok’s Institute Director Certification Program (DCP), Class 62/ 2005, Thai Institute of Directors Association (IOD) Director Accreditation Program (DAP), Class 40/ 2005, Thai Institute of Directors Association (IOD) Finance for Non-finance Directors Program (FND), Class 22/ 205, Thai Institute of Directors Association (IOD) DCP Refresher Course (DCP RE), Class 1/ 2008, Thai Institute of Directors Association (IOD)

Possession of IRPC shares (%) No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years 2014 - 2016 2013 - 2016 2013 - 2016 2014 - 2015 2014 - 2015 2013 - 2015 2005 - 2012

Chairman, The Transport Company limited Director, Office of The National Economic and Social Development Board Director, The Krungthep Thananakom Company Limited Member of the National Reform Council Director, Loxley Public Company Limited Senior Consultant, The Bangchak Petroleum Public Company Limited President, The Bangchak Petroleum Public Company Limited

2011 - 2012 2011 - 2012 2008 - 2012 2008 - 2011 2008 - 2011 2007 - 2011

Current Position

Chariman, Bangchak Solar Energy Company Limited Chariman, The Ubon Bioethanol Company Limited Chariman, The Bangchak Biofuel Company Limited Chairman, Thailand Business Council for Sustainable Development (TBCSD) Director, Thai Capital Market Organizations Director, Thai Listed Companies Association

Board member/ Management in Listed Company - The Stock Exchange of Thailand Sep 2016 - Present Chairman of Corporate Governance Committee, IRPC Public Company Limited Aug 2016 - Present Independent Director, IRPC Public Company Limited 2016 - Present Independent Director/ Chairman of the Corporate Governance Committee/ Member of the Nomination and Remuneration Committee, Pruksa Holding Public Company Limited 2016 - Present Director, B.Grimm Power Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand 2014 - Present Independent Director, Pruksa Real Estate Public Company Limited

Boards of Directors

Mr. Somnuk Bomrungsalee

General Theppong Tippayachan

Independent Director / Chairman of Audit Committee

Independent Director/ Member of the Corporate Governance Committee

Age 60 Years Directorship Starting Date: 9 April 2014

Age 59 Years Directorship Starting Date: 1 September 2016

Education/ Training

• Bachelor of Engineering (Civil Engineering), King Mongkut’s University of Technology Thonburi (Kmutt) • Master of Public and Private Management, The National Institute of Development Administration NIDA) • Energy Executive Course, Class 2/ 2008, Ministry of Energy • Executive Training Course, Class 65/ 2009, Office of the Civil Service Commission • Executive Training Course 2, Class 5/ 2013, Office of the Civil Service Commission • The Executive Program in Energy Literacy for a Sustainable Future, Class 5/ 2014, Thailand Energy Academy (TEA) • The Program for Senior Executive on Justice, Class 20/ 2015, Administration Batch, National Justice Academy • Course in Politics and Governance in Democratic Systems for Executives, Class 16/ 2012, King Prajadhipok’s Institute • Director Certification Program (DCP), Class 233/ 2017, Thai Institute of Directors (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years

Apr 2016 – Nov 2017 Oct 2016 – Sep 2017 Jul 2014 – Sep 2016 2013 - 2014 2011 - 2013 2006 - 2011

Current Position

Member of Nomination and Remuneration Committee, IRPC Public Company Limited Deputy Secretary of Energy Inspector General, Ministry of Energy Director–General, Department of Energy Business, Ministry of Energy Deputy Director General, Department of Energy Business Director, Bureau of Fuel Business Safety, Department of Energy Business

Board member/ Management in Listed Company - The Stock Exchange of Thailand Dec 2017 – Present Chairman of Audit Committee, IRPC Public Company Limited Oct 2017 – Present Independent Director, IRPC Public Company Limited Apr 2014 - Present Director, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand None

• • • •

Armed Forces Preparatory School, Class 18/ 1975 Chulachomklao Royal Military Academy, Class 29/ 1977 Master of Public Administration, Burapha University The National Defence College (NDC), Class 54/2011

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Oct 2016 – Sep 2017 Assistant Commander in Chief, Royal Thai Army Aug 2014 - Nov 2016 Director, Provincial Waterworks Authority Oct 2015 – Sep 2016 1st Army Area Commander 2014 1st Corps Commander 2013 Deputy Commander of 1st Army Area 2011 Commanding General of 2nd Infantry Division, Queen’s Guard

Current Position

Board member/ Management in Listed Company - The Stock Exchange of Thailand Apr 2017 – Present Member of the Corporate Governance Committee, IRPC Public Company Limited Sep 2016 - Present Independent Director, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Oct 2017 – Present Permanent Secretary for Defence, Office of the Permanent Secretary for Defence

2017 Annual Report IRPC Public Company Limited

General Sasin Thongpakdee

Mr. Ekniti Nitithanprapas

Independent Director/ Member of Corporate Governance Committee

Director / Member of Risk Management Committee

Age 59 Years Directorship Starting Date: 1 September 2014

Age 46 Years Directorship Starting Date: 17 November 2015

Education/ Training

• Armed Forces Academy Preparatory School • Chulachomklao Royal Military Academy • Royal Thai Army Command and General Staff College, Class 68/ 1989 • Joint Services Staff College, Thailand, Class 40/ 1998 • The Joint State-Private Sector Course, Class 24/ 2011, National Defence College • Armour Officer Advance Course, Class 7/87, FT.KNOX, KY, USA • Junior Maintenance Officer Course, FT.KNOX, KY, USA • The Board’s Role in Strategic Formulation, Governance Matters Australia

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Oct 2016 – Sep 2017 2016 2012

Current Position

Chief of Staff, Royal Thai Army Deputy Chief of Staff, Royal Thai Army Director-General, Directorate of Operations, RTA

Board member/ Management in Listed Company - The Stock Exchange of Thailand Oct 2014 - Present Member of Corporate Governance Committee, IRPC Public Company Limited Sep 2014 - Present Independent Director, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Oct 2017 - Present Deputy Commander in Chief, Royal Thai Army

• • • • • • • •

B.A. in Economics, (Honor), Thammasat University M.S. in Economics/ Policy Economics, University of Illinois at Urbana-Champaign, USA Ph.D. in Economics/ Macroeconomics and International Finance, Claremont Graduate University, USA Advanced Certificate Course in Public Administration and Law for Executives, Class 9/ 2011, King Prajadhipok's Institute Director Certification Program (DCP), Class 93/ 2007, Thai Institute of Directors (IOD) Corporate Governance for Capital Market Intermediaries (CGI), Class 4/ 2015, Thai Institute of Directors (IOD) Role of the Nomination and Governance Committee (RNG), Class 8/ 2016, Thai Institute of Directors (IOD) Board Matters and Trend (BMT), Class 4/ 2017, Thai Institute of Directors (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years

Nov 2014 - Sep 2015 Nov 2012 – Nov 2014 Sep 2010 – Nov 2012

Current Position

International Economic Advisor of Fiscal Policy Office, Ministry of Finance Deputy Director-General of Fiscal Policy Office, Ministry of Finance Minister (Economics and Finance), Office of Economics and Financial Affairs for U.K. and Europe, Royal Thai Embassy, U.K.

Board member/ Management in Listed Company - The Stock Exchange of Thailand Mar 2016 - Present Member of Risk Management Committee, IRPC Public Company Limited Nov 2015 - Present Director, IRPC Public Company Limited Nov 2015 – Present Director, Siam Commercial Bank Public Company Limited Nov 2015 – Present Member of Nomination, Compensation and Corporate Governance Committee, Siam Commercial Bank Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Oct 2015 – Present Director-General of the State Enterprise Policy Office, Ministry of Finance Nov 2015 – Present Chairman, National Credit Bureau Company Limited

Boards of Directors

Miss Ruenvadee Suwanmongkol Independent Director / Member of Audit Committee

Age 53 Years Directorship Starting Date: 1 April 2016

Education/Training • • • • • • • • •

LL.B. (1st Class Honor and Gold Medal) Chulalongkorn University M.B.A.Walter A. Haas School of Business, University of California at Berkeley L.L.M. Harvard Law School, Cambridge Massachusetts, U.S.A. Barrister-at-Law Legal Training Institute, Thai Bar Association The Programme of Senior Executives on Justice Administration Batch 15 National Justice Academy Judicial Training Institute Office of Judiciary Diploma, National Defence College, The Joint State - Private Sector Course, Class 25, The National Defence College (NDC) The Anti-Corruption Strategic Management Course for Senior Executive, Class 5, Office of the National Anti-Corruption Commission Advanced Certificate Course in Promotion of Peaceful Society, Class 2, King Prajadhipok's Institute Director Certification Program (DCP), Class 127/2010, Thai Institute of Directors Association (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Mar 2011 - Feb 2017 2012 - 2014 2012 2009 - 2011

Director, Thai Committee for Refugees Foundation Director-General, Department of Probation, Ministry of Justice Inspectors General, Ministry of Justice, Spokesperson of the Ministry of Justice Deputy Director-General, Office of Justice Affairs, Ministry of Justice

Current Position

Board member/ Management in Listed Company - The Stock Exchange of Thailand Apr 2019 – Present Independent Director/ Member of Audit Committee, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Feb 2016 - Present Member of Board Directors/ Member of the Scrutiny Sub-Committee/ Chairman of the Legal Counseling Sub-Committee, Bank for Agriculture and Agricultural Cooperatives Jul 2015 - Present Member of Board of Directors/ Chairman of Corporate Social Responsibility Committee, Dhanarak Asset Development Nov 2015 - Present Committee Member, The Foundation Assanee Pollajan 2014 - Present Director-General, Legal Execution Department, Ministry of Justice Jul 2013 - Present Committee Member, The Foundation of Business Lawyer Promotion Present Committee Member, Women for Peace foundation

2017 Annual Report IRPC Public Company Limited

Mr. Chansin Treenuchagron Director / Member of Risk Management Committee A Director who is authorized to sign on behalf of the Company Age 57 Years Directorship Starting Date: 20 October 2015

Education/ Training

• • • • • • • • • • • • • • • • • • •

Bachelor of Economics Program, Thammasat University Master of Economic, Chulalongkorn University Executive Development Relation, Class 1, Directorate of Civil Affairs Air War College, Class 35/ 2006 Senior Executive Program (SEP), Class 20, Sasin Graduate Institute of Business Administration of Chulalongkorn University PTT Executive Leadership, General Electric, GE, New York, USA Advance Senior Executive Program (ASEP-5), Class 5/ 2010, KELLOGG & SASIN, Chicago, USA Advanced Certificate Course in Public Economics Management for Executives, Class 10, King Prajadhipok's Institute Leadership Excellence through Awareness and Practice (LEAP), INSEAD, Singapore & France Leadership Development Program III (LDP III), Class 1/ 2014, PTT Public Company Limited The National Defence College (NDC), Class 57/ 2014 The Executive Program in Energy Literacy for a Sustainable Future, Class 7/ 2015, Thailand Energy Academy (TEA7) Reward for Thammasat Best Economics Alumni 2015 Reward for Thammasat Best Alumni 2017 by Thammasat University Reward for Best Alumni 2017 by Directorate of Civil Affairs Director Certification Program (DCP), Class 85/ 2007, Thai Institute of Directors (IOD) Financial Statements for Directors (FSD), Class 12/ 2011, Thai Institute of Directors (IOD) Director Accreditation Program (DAP), Class 93/ 2011, Thai Institute of Directors (IOD) Charted Director Class (CDC), Class 11/ 2015, Thai Institute of Directors (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years

Apr 2017 – Dce 2017 Jan 2016 – Sep 2017 Nov 2015 – Dec 2017 Nov 2015 – Mar 2016 Oct 2015 – Dec 2015

Chairman, PTT Asahi Chemical Company Limited Senior Executive Vice President, Downstream Business Group Alignment, PTT Public Company Limited Chairman, PTT Polymer Marketing Company Limited Chairman, PTT Polymer Logistics Company Limited Senior Executive Vice President, Petrochemicals & Refining Business Unit PTT Public Company Limited

Apr 2015 - Oct.2015 Oct 2014 - Sep 2015 Oct 2014 - Dec 2015 Mar 2013 – Sep 2014 Nov 2012 – Sep 2014 Jun 2012 – Sep 2014 Jun 2012 – Sep 2014 Feb 2012 – Sep 2014 Dec 2011 – Jun 2014 Nov 2011 – Sep 2014 Nov 2011 – Aug 2014 Oct 2011 – Feb 2013

Current Position

Director, Thai Oil Public Company Limited Senior Executive Vice President, Corporate Strategy, PTT Public Company Limited Chairman, PTT Green Energy (Thailand) Company Limited Senior Executive Vice President, Corporate Commercial and Marketing, IRPC Public Company Limited Director, PTT Polymer Marketing Company Limited Director, UBE Chemical (Asia) Public Company Limited Director, PTT Polymer Logistics Company Limited Director, Rayong Acetylene Company Limited Director, Technology IRPC Company Limited Director, IRPC Polyol Company Limited Chairman, Rak Pa Sak Company Limited Senior Executive Vice President, Corporate Port and Asset Management Business Unit, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Oct 2017 – Present Chief Operating Officer, Infrastructure and Sustainability Management Business Group, PTT Public Company Limited Oct 2017 – Present Director / Member of Risk Management Committee / Member of Nomination and Remuneration Committee, Global Power Synergy Public Company Limited Apr 2016 – Present Member of Risk Management Committee, IRPC Public Company Limited Oct 2015 - Present Director, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Dec 2017 – Present Chairman, PTT Digital Solutions Company Limited

Boards of Directors

Mr. Jessada Promjart Independent Director/ Member of Audit Committee

Age 56 Years Directorship Starting Date: 16 March 2016

Education/ Training

• Bachelor of Accounting, Thammasat University • Master of Accounting, Thammasat University • The Anti-Corruption Strategic Management Course for Senior Executive, Class 1/ 2010, Office of the National Anti-Corruption Commission • TLCA Executive Development Program (EDP), Class 9/ 2012, Thai Listed Company Association • Advanced Diploma, Public Administration and Public Law, Class 12/ 2013, King Prajadhipok’s Institute • Public Director Certification Program (PDI), Class 14, King Prajadhipok's Institute • Company Secretary Program (CSP), Class 07/ 2004, Thai Institute of Directors (IOD) • Director Certification Program (DCP), Class 45/ 2004, Thai Institute of Directors (IOD) • Ethical Leadership Program (ELP), Class 5/ 2016, Thai Institute of Directors (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: 25,000 (Self: 5,000 Share Possession: 0.00002%) (Spouse: 20,000 Share Possession: 0.00010%)

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Jun 2016 – Apr 2017 Apr 2015 - May 2016 Sep 2014 – May 2016 Sep 2014 - May 2016 Sep 2014 - May 2016 Sep 2014 - May 2016 Sep 2014 - May 2016 2008 - 2015 2014 2013 - 2014

Director, Chu Kai Public Company Limited Audit Committee and Advisors, Chulabhorn Hospital Chief Executive Officer, Chu Kai Public Company Limited Director, The Crane Services Company Limited Director, The Crane Laem Chabang Company Limited Director, The Crane Rayong Company Limited Director, The Crane Heavy Lift Company Limited Director, D-Land Development Company Limited Vice Chairman of the Board, SEED MCOT Company Limited Executive Vice President and Chief Financial Officer, MCOT Public Company Limited

2008 - 2014 2009 - 2013 2011 - 2012

Current Position

Independent Director and Audit Committee, Chu Kai Public Company Limited Chief Financial Officer, MCOT Public Company Limited Director, True Corporation Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Sep 2016 - Present Independent Director/ Member of Audit Committee, IRPC Public Company Limited Mar 2016 - Present Director, IRPC Public Company Limited Apr 2015 - Present Independent Director and Audit Committee, Nation Broadcasting Corporation Public Company Limited Apr 2015 – Present The Corporate Governance Committee, Joint Operation Agreement between Bangkok Entertainment Company Limited (BEC) and MCOT Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Apr 2017 – Present Audit Committee, Chulabhorn Royal Academy Nov 2016 – Present Director and Audit Committee, Expressway Authority of Thailand Dec 2015 – Present Director and Audit Committee, Government Savings Bank (Thailand) Apr 2015 – Present Director of Construction Sector, Chulabhorn Hospital and Chulabhorn Medicine Institute, Chulabhorn Hospital Mar 2015 – Present Corporate Governance Committee of the agreement of shopping center, Paholyothin road’s advantage between State Railway of Thailand and Central Inter Patthana Company Limited

2017 Annual Report IRPC Public Company Limited

Mr. Kris Imsang

Miss Nantika Thangsuphanich

Director/ Member of Corporate Governance Committee

Director/ Member of Nomination and Remuneration Committee

Age 52 Years Directorship Starting Date: 2 December 2017

Education/ Training

• • • • • •

Bachelor of Engineering (Civil Engineering), Chulalongkorn University Leadership Development Program III, Class 2, PTT Public Company Limited Certification in Top Executives in the Poom Palung Pandin Program, Class 3, Chulalongkorn University Top Executive Program, Class 23, Capital Market Academy (CMA) Top Executive in Energy Program, Class 9, Thailand Energy Academy (TEA) Director Certification Program (DCP), Class 139/2010, Thai Institute of Directors (IOD)

Family relationship within the Company, major shareholder or subsidiaries

• Bachelor of Arts (Political Science), Kasetsart University • Master of Arts (Urban Studies), Long Island University, USA • Energy Literacy for the World, Class 7, Thailand Energy Academy • Public Director Certification Program, Class 10, Public Director Institute, King Prajadhipok’s Institute • e-Government Executive Program (e-GAP), Class 2, Electronic Government Agency (Public Organization) • Strengthen Ministry Inspector General Skills, Class 2010, Office of the Civil Service Commission and The Prime Minister’s Office • Civil Service Executive Program: Visionary and Moral Leadership, Class 66, Office of the Civil Service Commission

Work experience within the past 5 years

No. of share “IRPC”: - Share Possession: - %

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - % None

Feb 2016 – Dec 2017 Feb 2016 - Dec 2017 2015 – Jan 2016 2013 – 2015 2012 – 2013

Current Position

Senior Executive Vice President, Human Resources & Organization Excellence, PTT Public Company Limited Chairman, PTT ICT Solutions Company Limited Executive Vice President, Retail Marketing, PTT Public Company Limited Executive Vice President, Petroleum Terminal Operations, PTT Public Company Limited Executive Vice President, Lubricant Business, PTT Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Dec 2017 – Present Director/ Member of Corporate Governance Committee, IRPC Public Company Limited Jan 2018 – Present Senior Executive Vice President, Organization Management and Sustainability, PTT Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Sep 2017 – Pressent Chairman, Sarn Palung Social Enterprise Company Limited Feb 2016 - Present Chairman, Energy Complex Company Limited 2016 - Present Committee, Chulalongkorn University Alumni Association (CUAA) 2009 – Present Committee, Chulalongkorn Engineering Alumni

Possession of IRPC shares (%)

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Nov 2016 – Dec 2017 June 2015 – Apr 2017 Mar 2015 – Apr 2017 2009 – 2017 2007 – 2009

Current Position

Director, Thai Oil Public Company Limited Director, CAT Telecom Public Company Limited Director, Thailandpost Distribution Company Limited Inspector General, Ministry of Energy Director of General Administration Bureau

Board member/ Management in Listed Company - The Stock Exchange of Thailand Dec 2017 – Present Director/ Member of Nomination and Remuneration Committee, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Oct 2017 – Present Deputy Secretary of Energy

Boards of Directors

Mr. Sukrit Surabotsopon Director/ Member of Risk Management Committee/ President/ Secretary of the Board of Directors/ A Director who is authorized to sign on behalf of the Company Age 59 Years Directorship Starting Date: 1 October 2013

Education/ Training • Bachelor of Engineering in Chemical Engineering with 2nd Class Honor, Chulalongkorn University • TLCA Executive Development Program (EDP), Class 3/ 2009, Thai Listed Company Association • Politics and Governance in Democratic Systems for Executives Course, Class 15/ 2012, King Prajadhipok's Institute • Capital Market Academy Leader Program, Class 16/ 2013, Capital Market Academy • The Joint State – Private Sector Course, Class 26/ 2013, National Defence College • The Executive Program in Energy Literacy for a Sustainable Future, Class 6/ 2015, Thailand Energy Academy (TEA) • Director Certification Program (DCP), Class 132/ 2010, Thai Institute of Directors (IOD) • Audit Committee Program (ACP), Class 38/ 2012, Thai Institute of Directors (IOD) • Monitoring the System of Internal Control & Risk Management (MIR), Class 12/ 2012, Thai Institute of Directors (IOD) • The Board’s Role in Strategic Formulation, Governance Matters Australia

Possession of IRPC shares (%) No. of share “IRPC”: 8,500,000 Share Possession: 0.04160%

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Jan 2014 – Feb 2018 Feb 2015 – Jun 2017 Aug 2014 – Jul 2016 Nov 2013 - Jun 2015

Chairman, Petroleum Refining Industry Club, The Federation of Thai Industries Chairman, IRPC PCC Company Limited Chairman, Thai ABS Company Limited Director, PTT Polymer Marketing Company Limited

Jan 2012 - Oct 2013 Oct 2011 - Sep 2013 Jan 2010 - Sep 2013 Mar 2009 - Oct 2013

Current Position

Director, PTT International Company Limited Director, PTT Global Chemical Public Company Limited Senior Executive Vice President, Petrochemicals & Refining Business Unit, PTT Public Company Limited Director, Star Petroleum Refining Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Oct 2014 - Present Member of Risk Management Committee, IRPC Public Company Limited Oct 2013 - Present Director/ President/ Secretary of the Board of Directors, IRPC Public Company Limited Oct 2013 - Present Senior Executive Vice President, Downstream Petroleum Business Group, PTT Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Jan 2017 – Present Chairman, PTT Energy Solutions Company Limited Jan 2014 – Present Director, The Federation of Thai Industries Mar 2015 - Present Chairman, IRPC Technology Company Limited Aug 2014 - Present Chairman, IRPC Oil Company Limited Aug 2014 - Present Chairman, IRPC Polyol Company Limited Nov 2013 - Present Chairman, IRPC A&L Company Limited Nov 2013 - Present Director, UBE Chemicals (Asia) Public Company Limited

2017 Annual Report IRPC Public Company Limited

Miss Jiraphon Kawswat

Mr. Chavalit Punthong

Director/ Member of Nomination and Remuneration Committee

Director/ Member of Nomination and Remuneration Committee/ A Director who is authorized to sign on behalf of the Company (Resigned, effective from 31 January 2018)

Age 56 Years Directorship Starting Date: 14 February 2018

Age 61 Years Directorship Starting Date: 17 November 2015

Education/ Training

• • • • • • • • •

Bachelor of Science (Accounting), Kasetsart University Master of Accountancy (Cost Accounting), Chulalongkorn University Master of Business Administration (Financial Management), Kasetsart University Executive Development Program (EDP), Thai Listed Companies Association Senior Executive Program, London Business School, United Kingdom Thai ASEAN Economic Community, Class 5/ 2014, College of Politics and Governance, King Prajadhipok’s Institute TLCA Leadership Development Program, Class 2/ 2014, Thai Listed Companies Association Leadership Development Program III, Class 2/ 2015, PTT Leadership and Learning Institute, PTT Public Company Limited Directors Certification Program Update (DCPU), Class 2/ 2014, Thai Institute of Directors (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years 2016 – Sep 2017 2012 – 2016 2006 – 2012

Current Position

Managing Director, PTT Retail Management Company Limited Executive Vice President, Planning, Oil Business Unit, PTT Public Company Limited Vice President, Managerial Accounting, PTT Public Company Limited

Board member/Management in Listed Company - The Stock Exchange of Thailand Feb 2018 - Present Director/ Member of Nomination and Remuneration Committee IRPC Public Company Limited Oct 2017 - Present Senior Executive Vice President, Oil Business Unit, PTT Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Sep 2018 - Present Chairman, PTT Retail Management Company Limited Jan 2016 - Present Director, PTT Oil and Retail Business Company Limited

• • • • • • •

Bachelor of Engineering (Mechanical), Kasetsart University MBA, Central Missouri State University, USA. Senior Executive Program (SEP), Sasin Graduate Institute of Business Administration of Chulalongkorn University PTT: GE Executive Leadership Program, GE Croton Ville, USA Nida: Wharton Executive Leadership Program 2009, The Wharton School, University of Pennsylvania, USA Capital Market Academy Leader Program, Class 18, Capital Market Academy Director Certification Program (DCP), Class 177/2013, Thai Institute of Directors (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years

Oct 2015- Oct 2017 Oct 2016 – Oct 2017 Dec 2015 - Oct 2017 2013 – Nov 2015 2013 - 2015 2012 – Nov 2015 2012 – Nov 2015 2011 - 2013 2010 - 2011

Current Position

Chief Operating Officer Infrastructure and Sustainability Management Business Group, PTT Public Company Limited Member of Risk Management Committee, Global Power Synergy Public Company Limited Director, Global Power Synergy Public Company Limited Chairman, Thai Petroleum Pipeline Company Limited (Thappline) Senior Executive Vice President, Oil Business Unit, PTT Public Company Limited Chairman, PTT Retail Management Company Limited (PTTRM) Chairman, PTT Retail Business Company Limited (PTTRB) Executive Vice President, Retail Marketing, PTT Public Company Limited Executive Vice President, Commercial & International Marketing, PTT Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Apr 2016 - Present Member of Nomination and Remuneration Committee, IRPC Public Company Limited Nov 2015 - Present Director, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand None

Boards of Directors

Mr. Songpope Polachan

Mr. Pramoul Chanpong

(Resigned, effective from 31 January 2018)

Age 63 Years Directorship Starting Date: 5 April 2013

Age 62 Years Directorship Starting Date: 1 April 2014

Education/ Training

• • • • • • • • • • •

Bachelor of Science (Geology), Chiang Mai University Ph.D. (Petroleum Geology), Royal Holloway and Bedford New College, University of London, U.K. Top Executive Program in Administrative Justice Development, Class 3, Administrative Justice Development Institute The Executive Program in Energy Literacy for a Sustainable Future (TEA), Class 2, Thailand Energy Academy The National Defence College (NDC), Class 50 Advanced Executive Program, Kellogg School of Management, Northwestern University, USA ASEAN Executive Program, New York, USA Senior Executive Service Course, Class 42, Office of the Civil Service Commission Director Accreditation Program (DAP), Class 23/ 2004, Thai Institute of Directors (IOD) Finance for Non-finance Directors Program (FND), Class 9/ 2004, Thai Institute of Directors (IOD) The Board’s Role in Strategic Formulation, Governance Matters Australia

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder of subsidiaries None

Work experience within the past 5 years Sep 2016 – Nov 2017 Jun 2015 – Nov 2017 Oct 2014 - Nov 2017 Apr 2013 - Nov 2017 Apr 2013 - Apr 2016 Jul 2014 - Sep 2014 2010 – 2014

Current Position

Chairman of Audit Committee, IRPC Public Company Limited Member of Audit Committee, IRPC Public Company Limited Independent Director, IRPC Public Company Limited Director, IRPC Public Company Limited Member of Nomination and Remuneration Committee, IRPC Public Company Limited Inspector General, Ministry of Energy Director General, Department of Mineral Fuels, Ministry of Energy

Board member/ Management in Listed Company - The Stock Exchange of Thailand None Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand

2015 - Present

Chairman, Right Tunnelling Company Limited

• • • • • • • • •

Bachelor of Engineering in Electrical Engineering (Electrical Power), Rajamangala Institute of Technology Master of Arts (Political Science), Kasetsart University Certificate of Rational Use of Energy, Asian Institute of Technology (AIT) Professional Engineer Diploma, The State Private Political Sector Course, Class 6, National Defence College Senior Executive Training Course, Batch 45, The Civil Service Training Institute, Office of the Civil Service Commission Energy Executive Course, Class 2, Ministry of Energy The Course for Middle Executive Officer, Ministry of Science and Technology The Board’s Role in Strategic Formulation, Governance Matters Australia

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Oct 2016 – Nov 2017 Oct 2014 – Nov 2017 Apr 2014 – Nov 2017 Jul 2014 – Sep 2016 2013 - 2014

Current Position

Independent Director, IRPC Public Company Limited Member of Corporate Governance Committee, IRPC Public Company Limited Director, IRPC Public Company Limited Inspector General, Ministry of Energy Director-General, Dept. Of Alternative Energy Development and Efficiency

Board member/ Management in Listed Company - The Stock Exchange of Thailand None Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand None

2017 Annual Report IRPC Public Company Limited

Organization Structure As of February 1, 2018 SHAREHOLDERS BOARD OF DIRECTORS Corporate Governance Committee

Risk Management Committee

Audit Committee

Nomination and Remuneration Committee

PRESIDENT RD Materials and Chemicals Dept.

Office of Corporate Internal Audit

Innovative Product Center Strategic Transformation and Result Delivery Office

Corporate Affairs

Petrochemical and Refinery Business Unit Petrochemical and Refinery Operation • • • • • •

Polyolefins Dept. Styrenics and Aromatics Dept. Olefins Dept. Refinery Dept. Lube Base Oil Dept. RDCC Dept.

Engineering and Maintenance • • • •

Inspection and Reliability Dept. Maintenance Service 1 Dept. Maintenance Service 2 Dept. Engineering Dept.

Operation Support • • • • •

Logistics and Depot Management Dept. Power Plant Dept. Tank Farm and Port Operation Dept. Technology Dept. Operational Excellence and Corporate Quality Management Dept.

IRPC Industrial Zone Management Dept. Safety, Occupation Health and Environment Management Dept.

Corporate Commercial and Marketing • Petrochemical Business Sales Dept. • Petrochemical Business Marketing Dept. • Petroleum Business • Port and Asset Business Dept. • Business Operation Planning Dept. • Scheduling and Inventory Control Dept. • Crude/ Feedstock Supply and Trading Dept.

RD Polymer Dept. RD Customer Solution Dept. Analytical and Laboratory Center Dept.

Sustainability Management Office

Corporate Accounting and Finance • Treasury Dept. Corporate Human Resources • Finance and Investor Relations Dept. • Managerial Accounting and Budgeting Dept. • Accounting Dept. • Procurement Dept.

Corporate Human Resources • • • • •

People Strategy Organization Effectiveness Learning Organization People Values Management Pepople Share Service

Corporate Business Planning • Strategic Planning and Management Dept. • Information and Communication Technology Dept.

Corporate Business Development • Petrochemical and Performance Material Business Development Dept. • Petroleum and Energy Business Development Dept.

Managements Team

Mr. Pongpraphan Titathavewatana Senior Executive Vice President, Petrochemical & Refinery Business Unit

Mr. Sukrit Surabotsopon President

Mrs. Rachadaporn Rajchataewindra Senior Executive Vice President, Corporate Accounting & Finance

Mr. Somkiat Lertritpuwadol

Senior Executive Vice President, Corporate Accounting & Finance

2017 Annual Report IRPC Public Company Limited

Miss Wanida Utaisomnapa

Mr. Sirimet Leepagorn

Mr. Chalor Panutrakul

Mr. Pravet Assavadakorn

Mr. Thammasak Panyowatkool

Miss Monwipa Choopiban

Executive Vice President, Corporate Business Planning

Executive Vice President, Innovative Product Center

Executive Vice President, Stategic Transformation and Result Delivery Office

Executive Vice President, Officiate as Office of Internal Audit Manager

Executive Vice President, Corporate Business Development

Executive Vice President, Corporate Affairs/ Company Secretary

Managements Team

Mr. Veerawat Srinoradithlert Executive Vice President, Engineering & Maintenance

Mr. Phothiwat Paopongchuang Executive Vice President, President Office/ Managing Director, Technolgy IRPC Company Limited.

Mr. Woravuth Sivapetranart Executive Vice President, Refinery and Petrochemical Operation

Miss Awrapin Ketratanakul

Executive Vice President, Sustainability Management Office

Mr. Vichit Nittayanonte

Executive Vice President, Operation Support

Mr. Kraisit Anukoolutaiwong Executive Vice President, Corporate Human Resource

2017 Annual Report IRPC Public Company Limited

Management Term Mr. Sukrit Surabotsopon President

Age: 59 Years Appointed as a Executive under the regulations of SEC since October 1, 2013

Possession of IRPC shares (%) No. of share “IRPC”: 8,500,000 Share Possession: 0.04160%

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Feb 2015 – Jun 2017 Aug 2014 – Jul 2016 Nov 2013 - Jun 2015 Jan 2012 - Oct 2013 Oct 2011 - Sep 2013

Chairman, IRPC PCC Company Limited Chairman, Thai ABS Company Limited Director, PTT Polymer Marketing Company Limited Director, PTT International Company Limited Director, PTT Global Chemical Public Company Limited

Jan 2010 - Sep 2013 Mar 2009 - Oct 2013

Current Position

Senior Executive Vice President, Petrochemicals & Refining Business Unit, PTT Public Company Limited Director, Star Petroleum Refining Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Oct 2014 - Present Member of Risk Management Committee, IRPC Public Company Limited Oct 2013 - Present Director/ President / Secretary of the Board of Directors, IRPC Public Company Limited Oct 2013 - Present Senior Executive Vice President, Downstream Petroleum Business Group, PTT Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Jan 2017 – Present Chairman, PTT Energy Solutions Company Limited Mar 2015 - Present Chairman, IRPC Technology Company Limited Aug 2014 - Present Chairman, IRPC Oil Company Limited Aug 2014 - Present Chairman, IRPC Polyol Company Limited Nov 2013 - Present Chairman, IRPC A&L Company Limited Nov 2013 - Present Director, UBE Chemicals (Asia) Public Company Limited

Managements Team

Mr. Pongpraphan Titathavewatana

Mr. Somkiat Lertritpuwadol

Senior Executive Vice President, Petrochemical & Refinery Business Unit

Senior Executive Vice President, Corporate Commercial and Marketing

Age: 59 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Age: 55 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Education/ Training • • •

Bachelor of Science (Chemistry), Khon Kaen University Mini MBA, Thammasart University Certificate of Executive Education Program for Senior Management, Fiscal Policy Research Institute Foundation, year 2009

Possession of IRPC shares (%) No. of share “IRPC”: 414,478 Share Possession: 0.00203%

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Jan 2016 - Dec 2016 2014 - 2015 2013 - 2014 Jun 2013 - Dec 2013 2011 - 2013 2010 - 2011

Current Position

Acting Executive Vice President, Refinery Operation, IRPC Public Company Limited Executive Vice President, Refinery Operation, IRPC Public Company Limited Executive Vice President Asset Management, Executive Vice President Port Business (Acting), IRPC Public Company Limited Director, IRPC Clean Power Company Limited Executive Vice President Operation 4, IRPC Public Company Limited Executive Vice President Operation 3, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Jan 2016 - Present Senior Executive Vice President, Petrochemical & Refinery Business Unit, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Mar 2016 - Present Director, IRPC A&L Company Limited Jan 2016 - Present Director, IRPC Clean Power Company Limited

Education/ Training

• Bachelor of Science (Chemistry), Ramkhamhaeng University • Master of Business Administration, Asian University • Mini MBA, Thammasart University • The Executive Program in Energy Literacy for a Sustainable Future (TEA) Class 9, Thailand Energy Academy • Director Accreditation Program (DAP), Class 111/ 2014, Thai Institute of Directors (IOD) • Director Certification Program (DCP), Class 224/ 2016, Thai Institute of Directors (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: 311,480 (Self: 295,580 Share Possession: 0.00145%) (Spouse: 15,900 Share Possession: 0.00008%)

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years

Feb 2015 - Jun 2017 Jan 2016 - Dec 2016 Feb 2012 - Jul.2016 Oct 2012 - May 2015 2011 - 2015 2010 - 2011

Current Position

Director, IRPC PCC Company Limited Acting Executive Vice President, Corporate Marketing, IRPC Public Company Limited Director, Thai ABS Company Limited Director, TPI Internet Portal Company Limited Executive Vice President, Corporate Marketing, IRPC Public Company Limited Executive Vice President, Corporate Planning Supply Feedstock&Trading/ Acting Executive Vice President, Research and Development, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Jan 2016 - Present Senior Executive Vice President, Corporate Commercial and Marketing, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Jan 2016 - Present Acting Managing Director, IRPC OIL Company Limited Jan 2016 - Present Acting Managing Director IRPC A&L Company Limited Dec 2014 - Present Director, IRPC A&L Company Limited Dec 2014 - Present Director UBE Chemical (Asia) Public Company Limited Feb 2012 - Present Director, IRPC Oil Company Limited

2017 Annual Report IRPC Public Company Limited

Mrs. Rachadaporn Rajchataewindra

Mr. Vichit Nittayanonte

Senior Executive Vice President, Corporate Accounting & Finance

Executive Vice President, Operation Support

Age: 59 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Age: 58 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Education/ Training

• • • • • • • • • • • •

Bachelor of Art (Accounting), Chiang Mai University Bachelor of Law, Sukhothai Thammathirat University Master of Business Administration, International Business (English Program), University of the Thai Chamber of Commerce PTT Group Leadership Development Program III, PLLI NIDA-Wharton Executive Leadership Program, The Wharton School University of Pennsylvania TLCA Executive Development Program (EDP), Class 4/ 2009, Thai Listed Companies Association Capital Market Academy Leader Program, Class 25/ 2017, Capital Market Academy, The Stock Exchange of Thailand Director Accreditation Program (DAP), Class 111/ 2014, Thai Institute of Directors (IOD) Corporate Governance for Executive, Class 1/ 2014, Thai Institute of Directors (IOD) Successful Formulation and Execution of Strategy, Class 21/ 2014, Thai Institute of Directors (IOD) Director Certification Program (DCP), Class 204/ 2015, Thai Institute of Directors (IOD) The Board’s Role in Strategic Formulation, Governance Matters Australia

Possession of IRPC shares (%)

No. of share “IRPC”: 82,000 (Self: 22,000 Share Possession: 0.00011%) (Spouse: 60,000 Share Possession: 0.00029%)

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Apr 2016 - Jun 2017 Dec 2015 - Jul 2016 2010 - Oct 2015

Current Position

Director, IRPC PCC Company Limited Director, Thai ABS Company Limited Vice President, Corporate, PTT Asahi Chemical Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Nov 2015 - Present Senior Executive Vice President, Corporate Accounting & Finance, IRPC Public Company Limited Nov 2015 - Present Executive Vice President, Corporate Finance & Accounting, PTT Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Dec 2015 - Present Director, IRPC OIL Company Limited Dec 2015 - Present Director, IRPC Polyol Company Limited Dec 2015 - Present Director, UBE Chemicals (Asia) Public Company Limited Nov 2015 - Present Director, IRPC Clean Power Company Limited Nov 2015 - Present Director, IRPC A&L Company Limited

• • • • •

Bachelor of Science (General Science), Chulalongkorn University Master of Business Administration Degree, Burapa University Mini MBA Thammasat University Director Accreditation Program (DAP), Class 91/ 2011, Thai Institute of Directors (IOD) Financial Statements for Directors (FSD), Class 12/ 0211, Thai Institute of Directors (IOD)

Possession of IRPC shares (%) No. of share “IRPC”: 333,394 Share Possession: 0.00163%

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years Jan 2016 - Dec 2016 2012 - 2016 Dec 2012 - Jul.2016 Feb 2012 - Dec 2015 2010-2012

Current Position

Acting Managing Director, IRPC Polyol Company Limited Executive Vice President, Petrochemical Operation, IRPC Public Company Limited Acting Managing Director, Thai ABS Company Limited Director, Thai Polyurethane Industry Company Limited Managing Director, IRPC Polyol Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Mar 2017 - Present Director, Rakpasak Company Limited Dec 2014 - Present Director, IRPC A&L Company Limited Feb 2012 - Present Director, IRPC Oil Company Limited Feb 2012 - Present Director, IRPC Polyol Company Limited Feb 2012 - Present Director, Thai Polyurethane Industry Company Limited

Managements Team

Mr. Woravuth Sivapetranart

Mr. Veerawat Srinoradithlert

Executive Vice President, Refinery and Petrochemical Operation

Executive Vice President, Engineering & Maintenance

Age: 54 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Age: 55 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Education/ Training

• • •

Bachelor of Science (Chemistry), Prince of Songkla University Master of Business Administration (Business Administration), Chulalongkorn University MINI MBA, Thammasat University

Possession of IRPC shares (%) No. of share “IRPC”: 179,351 Share Possession: 0.00088 %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years 2014 - 2016 2011 - 2014 2010 - 2011

Current Position

Executive Vice President, Technology & Operational Excellence, IRPC Public Company Limited Executive Vice President Operation 2, IRPC Public Company Limited Acting Executive Vice President, Operation 2, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Jan 2017 - Present Executive Vice President, Refinery and Petrochemical Operation, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Mar 2017 - Present Director, IRPC Polyol Company Limited Apr 2017 - Present Director, IRPC A&L Company Limited

Bachelor of Engineering (Chemical Engineering), King Mongkut Thonburi University Master of Business Administration, Burapha University Mini MBA, Thammasat University

Possession of IRPC shares (%) No. of share “IRPC”: 10,579 Share Possession: 0.00005%

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years 2011 - 2012 2010 - 2011

Current Position

Vice President, Complex 1 Department/ Analytical Center & Laboratory Department, IRPC Public Company Limited Vice President, Complex 1 Department, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand 2012 - Present Executive Vice President, Engineering & Maintenance, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand None

2017 Annual Report IRPC Public Company Limited

Mr. Sirimet Leepagorn

Miss Wanida Utaisomnapa

Executive Vice President, Strategic Transformation and Result Delivery Office

Executive Vice President, Corporate Business Planning

Age: 50 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Age: 51 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Education/ Training

• • • • •

Bachelor of Science (Chemistry), Chiang Mai University Master of Business Administration, Burapha University PTT Leadership Development Program (LDP II), Havard Business School GE Leadership Development Program Director Certification Program (DCP), Class 205/ 2015, Thai Institute of Directors (IOD)

Possession of IRPC shares (%)

No. of share “IRPC”: 143,154 (Self: 113,292 Share Possession: 0.00055%) (Spouse: 29,862 Share Possession: 0.00015%)

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 year Jan 2016 - Dec 2017 Feb 2015 - Feb 2016 Oct 2014 – 2015 Jul 2013 - Sep 2014 2010 - 2013

Current Position

EVEREST Project Director, IRPC Public Company Limited Secretary of the Risk Management Committee, IRPC Public Company Limited Executive Vice President, Corporate Business Planning, IRPC Public Company Limited Acting Executive Vice President, Corporate Business Planning, IRPC Public Company Limited Vice President Refinery and Related Business Development, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Dec 2017 - Present Executive Vice President, Strategic Transformation and Result Delivery Office Jan 2016 - Present EVEREST Project Director Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Jan 2015 - Present Acting President, IRPC Clean Power Company Limited Sep 2014 - Present Director, IRPC Clean Power Company Limited Feb 2012 - Present Director, IRPC Oil Company Limited

• Bachelor of Business Administration (Finance with second class honors), Bangkok University • Master of Business Administration (Finance and Marketing), National University, San Diego, USA • Leadership/ The 7 HABITS of Highly Effective People, PacRim/ FranklinCovey • PTT-HBS Leadership Development Program Class 1, Harvard Business School, India&China • Refinery Economics, Solomon Associates, Singapore • IRPC Middle Management Leadership Development Program Wave, Class 1 • Advance Price Risk Management, Invincible Energy, Singapore • The Board’s Role in Strategic Formulation, Governance Matters Australia

Possession of IRPC shares (%) No. of share “IRPC”: 210,440 Share Possession: 0.00103 %

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years

2014 - 2015 2013 - 2014 2012 - 2013 2011 - 2012 2010 - 2011

Current Position

Executive Vice President, Corporate Planning Supply Feedstock and Trading, IRPC Public Company Limited Acting Executive Vice President, Corporate Planning Supply Feedstock and Trading/ Acting Vice President of Crude Feedstock Supply Trading Department/ Acting Price Risk Management Division Manager, IRPC Public Company Limited Vice President of Crude & Feedstock Supply Trading Department/ Acting Price Risk Management Division Manager, IRPC Public Company Limited Vice President, Business Operation Planning Department, IRPC Public Company Limited Division Manager, Crude Oil & Petroleum Feedstock Division, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Jan 2015 - Present Executive Vice President, Corporate Business Planning, IRPC Public Company Limited Feb 2015 - Present Secretary of the Risk Management Committee, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand None

Managements Team

Mr. Chalor Panutrakul

Mr. Pravet Assavadakorn

Executive Vice President, Corporate Business Development

Executive Vice President, Innovative Product Center

Age: 59 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Education/ Training

• Bachelor of Engineering (Chemical Engineering), Chulalongkorn University • Master of Business Administration (Management), Sasin Graduate Institute of Business Administration of Chulalongkorn University • Thai ASEAN Economic Community, Class 4/ 2013, College of Politics and Governance, King Prajadhipok’s Institute • Power of the Kingdom, Class 3/ 2014, Chula Unisearch, Chulalongkorn University • Advanced Security Management Program (ASMP), Class 4, The Association National Defense College of Thailand under the Royal Patronage of His Majesty the King • The Board’s Role in Strategic Formulation, Governance Matters Australia • Director Certification Program (DCP), Class 61/ 2005, Thai Institute of Directors (IOD)

• • • • • • • • • • •

No. of share “IRPC”: - Share Possession: - %

No. of share “IRPC”: 278,600 (Self: 253,600 Share Possession: 0.00124%) (Spouse: 25,000 Share Possession: 0.00012%)

Possession of IRPC shares (%)

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years 2012 - 2014 2010 - 2012

Current Position

Executive Vice President, Corporate Research and Development, IRPC Public Company Limited Executive Vice President, Line Business Port, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand 2014 – Present Executive Vice President, Corporate Business Development, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand None

Bachelor of Chemical (Engineering), University of Tokyo Master of Chemical (Energy Engineering), University of Tokyo Mini MBA, Thammasat University The Board’s Role in Strategic Formulation, Governance Matters Australia Project Investment & Feasibility Studies Program, The Asia Business Forum Leadership Development Program, DDI Executive Development Program, Fiscal Policy Research Institute Foundation The 7 Habits of highly effective people, PacRim Problem Solving Leadership Capability, Mckinsey Director Accreditation Program (DAP), Class 98/ 2012, Thai Institute of Directors (IOD) Director Certification program (DCP), Class 238/ 2017, Thai Institute of Directors (IOD)

Possession of IRPC shares (%)

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years 2014 - Apr 2015 2009 - 2014

Current Position

Executive Vice President, Corporate Research & Development Executive Vice President, Corporate Business Development, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand Apr 2015 - Present Executive Vice President, Innovative Product Center, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand Mar 2015 - Present Director, IRPC Polyol Company Limited

2017 Annual Report IRPC Public Company Limited

Mr. Kraisit Anukoolutaiwong

Mr. Thammasak Panyowatkool

Executive Vice President, Corporate Human Resource/ Acting People Strategy/ Acting Organization Effectiveness

Executive Vice President, Officiate as Office of Internal Audit Manager

Age: 56 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Age: 51 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Education/ Training

• • •

• • • •

Bachelor of Arts (Political Science), Thammasat University Master of Public Administration, National Institute of Development Administration (NIDA) Mini MBA, Thammasat University

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries

Bachelor of Science (Accounting), Kasetsart University Mini MBA: Executive Leadership Development Program Faculty of Commerce and Accountancy, Thammasat University The Manager Program, Management and Psychology Institute, Class 47 The Board’s Role in Strategic Formulation, Governance Matters Australia

Possession of IRPC shares (%)

None

No. of share “IRPC”: - Share Possession: - %

Oct 2012 - May 2015 Director, TPI Internet Portal Company Limited

None

Work experience within the past 5 years Current Position

Board member/ Management in Listed Company - The Stock Exchange of Thailand Feb 2018 - Present Acting People Strategy/ Acting Organization Effectiveness, IRPC Public Company Limited 2011 - Present Executive Vice President, Corporate Human Resource, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand 2015 - Present Director, Technology IRPC Company Limited

Family relationship within the Company, major shareholder or subsidiaries Work experience within the past 5 years 2014 - 2017 2014 - 2015 2013 - 2014 2010 - 2013

Current Position

Director, IRPC Technology Company Limited Executive Vice President, Corporate Accounting, IRPC Public Company Limited Acting Executive Vice President, Corporate Accounting, IRPC Public Company Limited Vice President, Managerial Accounting Department, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand 2016 - Present Executive Vice President, Officiate as Office of Internal Audit Manager and Secretary of Audit Committee IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand 2014 - Present Director, Rayong Acetylene Company Limited

Managements Team

Miss Awrapin Ketratanakul

Mr. Phothiwat Paopongchuang

Executive Vice President, Sustainability Management Office

Executive Vice President, President Office Managing Director, Technology IRPC Company Limited

Age: 58 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Age: 56 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Education/ Training

• Bachelor of Science (Medical Technology), Mahidol University • Master of Science (Environmental Engineering), Asian Institute of Technology • Doctor of Engineering (Urban Engineering), The University of Tokyo (TODAI), Tokyo, Japan • Mini MBA, Thammasat University • Leadership Great Leaders, Great Teams, Great Results By PacRim • Management Accounting for Non-financial Executives, Federation of Accounting Professions • Air Emission Abatement Technology for Petroleum& Petrochemical industry, The Overseas Human Resources and Industry Development Association (HIDA) • Change Acceleration Process, GE • PTT Group VP Leadership Development Program, PTT Public Company Limited • Executive Development Program 2010, Fiscal Policy Research Institute Foundation Kingdom of Thailand • The Board’s Role in Strategic Formulation, Governance Matters Australia

• Bachelor of Engineering (Mechanical Engineering), Khon Khan University • Master of Industrial (Management Engineering) King Mongkut’s University of Technology North Bangkok • Master of Public Administration, National Institute of Development Administration (NIDA) • Doctor of Business Administration (Industrial Business and Human Resource), King Mongkut’s University of Technology North Bangkok • Mini MBA, Thammasat University • Professional Engineer from Council of Engineers • The Board’s Role in Strategic Formulation, Governance Matters Australia • Director Certification Program (DCP), Class 243/ 2017, Thai Institute of Directors (IOD)

No. of share “IRPC”: 92,721 Share Possession: 0.00045%

Work experience within the past 5 years

Possession of IRPC shares (%)

Family relationship within the Company, major shareholder or subsidiaries None

Work experience within the past 5 years 2012 - 2014 2008 - 2012

Current Position

Executive Vice President, Corporate Quality, Safety, Occupational Health & Environment Department, IRPC Public Company Limited Vice President, Department of Corporate Quality Safety Health and Environment, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand 2014 - Present Executive Vice President, Sustainability Management Office, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand None

Possession of IRPC shares (%) No. of share “IRPC”: 64,320 Share Possession: 0.00031%

Family relationship within the Company, major shareholder or subsidiaries None

2011 – 2014 2010 – 2011

Current Position

Acting Executive Vice President, IRPC’s Office of Industrial Zone Management, IRPC Public Company Limited Vice President of CSR Division, IRPC Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand 2014 – Present Executive Vice President, President Office, IRPC Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand 2013 - Present Director, Sport Services Alliance Company Limited 2014 – Present Managing Director, Technology IRPC Company Limited

2017 Annual Report IRPC Public Company Limited

Miss Monwipa Choopiban Executive Vice President, Corporate Affairs/ Company Secretary Age: 59 Years Appointed as a Executive under the regulations of SEC since January 2, 2015

Education/ Training

Work experience within the past 5 years

• • • • • • • • • • • • • • • • • • • •

2014 - 2015 Oct 2012 - Apr 2015 Feb 2012 - Mar 2015 2011 - 2014 2010 - 2011

Bachelor of Education (English), Chulalongkorn University Master of Arts (English), Chulalongkorn University Master of Political Science (Political Communication), Political Communication College, Krirk University Fundamental Practice for Corporate Secretary, Thai Listed Companies Association (TLCA) Fundamentals of Law for Corporate Secretaries, Thai Listed Companies Association (TLCA) Company Secretary Program (CSP), Class 40/ 2011, Thai Institute of Directors (IOD) Director Certification Program (DCP), Class 164/ 2012, Thai Institute of Directors (IOD) Director Certification Program Update (DPCU), Class 3/ 2015, Thai Institute of Directors (IOD) Anti-Corruption: The Practical Guide (ACPG), Class 24/ 2015, Thai Institute of Directors (IOD) Anti-Corruption in Practice (ACPC), Thai Institute of Directors (IOD) Corporate Governance for Executives (CGE), Thai Institute of Directors (IOD) Board that Makes a Difference (BMD), Thai Institute of Directors (IOD) The Board’s Role in Strategic Formulation, Governance Matters Australia Programme of Activities AICHR TRAINING PROGRAMME ON BUSINESS AND HUMAN RIGHTS 2017 Politics and Governance in Democratic Systems for Executives Course, Class 21/ 2017, King Prajadhipok's Institute London Global Convention on Corporate Governance and Sustainability 2016, 2017 International Conference on Corporate Social Responsibility 2016, 2017 National Dialogue on Business and Human Rights (Global Compact Network Thailand) Sustainable Brand 2016, 2017 Social Enterprise and Human Right

Possession of IRPC shares (%)

No. of share “IRPC”: - Share Possession: - %

Family relationship within the Company, major shareholder or subsidiaries None

Current Position

Acting Executive Vice President, Corporate Affairs, IRPC Public Company Limited Director, TPI Internet Portal Company Limited Director, IRPC Oil Company Limited Vice President/ President’s Office and Company Secretary Acting Executive Vice President, Corporate Affairs IRPC Public Company Limited Vice President, Corporate Compliance and Communication and Company Secretary, PTT Aromatics and Refining Public Company Limited

Board member/ Management in Listed Company - The Stock Exchange of Thailand 2015 - Present Executive Vice President, Corporate Affairs, IRPC Public Company Limited 2013 - Present Secretary of Nomination and Remuneration Committee, IRPC Public Company Limited 2012 - Present Company Secretary/ Secretary of Corporate Governance Committee, IRPC Public Company Limited 2011 - Present Secretary of the Management Committee, IRPC Public Company Limited 2011 - Present Vice President, Downstream Petroleum Business Group PTT Public Company Limited Board member/ Management in Non-Listed Company - The Stock Exchange of Thailand 2015 - Present Director, Technology IRPC Company Limited 2017 - Present Director, Sarn Palung Social Enterprise Company Limited

Summary of the Board

Summary of the Board’s Opinion regarding 2017 Internal Control System At Board meeting No. 2/2018, held on February 13, 2018 in which independent directors and Audit committee attending the meeting, the Board has summarized their opinion pertinent to an internal control system of the Company in terms of sufficiency, appropriateness, weakness and solutions to resolve such weakness of the internal control system. This can be accomplished by inquiring information from the management, internal control department, business plan team as well as considering an evaluation form prepared by the management. The Board agreed that the Company’s internal control system is adequate and appropriate with five elements of the internal control. In addition, IRPC has provided sufficient personnel to efficiently operate the system while establishing the internal control system in monitoring and following-up the operation of its subsidiaries so that they can protect the Company’s and its subsidiaries’ property from being misused or exploited by the directors or executives, including any transactions with any individuals with possible conflict and other related persons. As for other topics of the internal control, the Board also agreed that the Company had set up an adequate internal control system. IRPC’s internal control system has regularly been updated with changes in internal and external circumstance. In 2017, the Company developed the system and summarized these following steps for inclusions in its annual report under the COSO (the Committee of Sponsoring Organizations of the Treadway Commission) which consists of 5 major components as described below: 1 Control environment The Board and the management encourage a corporate culture focusing on having smart and conscientious employees to help accomplish its vision and mission in a sustainable way with efficiency and effectiveness. The Board also encourages business operation and governance to follow IRPC’s code of conduct. To achieve this end, a sound and appropriate controlled environment should be set up as follows: The Board, independent of the management, strictly steers business as a whole, provides viewpoints on corporate strategic directions to guide preparation of business plans and operating plans. The Board constantly monitors corporate and the sub-committee performance to ensure goal accomplishment. The Board and the Management cooperatively define a written policy on corporate governance along with a policy on compliance with relevant laws, regulations, internal control policy and anti-corruption guidelines. These elements, in turn, will frame the performance of the directors, the management and employees through the requirement that every employee are responsible for internal control. To achieve this objective, IRPC regularly informs and publicizes such policies to all related parties. IRPC’s corporate structure is in the form of business groups and functions for corporate management efficiency and unison, with segregation of duties in key functions for checks and balances. IRPC defines individual positions’ qualifications to guide the selection and development of the workforce, specifies key succession plans and defines performance appraisal processes marked by high standards and reasonable systems so that rewarding will be fair and equitable and efficiently inspire employees. IRPC has actively implemented Three Lines of Defense, an internationally recognized approach. To elaborate this further, the first line consists of workers and their supervisors, the internal control unit and the compliance unit, the second line means other support units while the third line or Office of Corporate Internal Control consistently directs the operation, starting from risk assessment, specification of internal control activities, monitoring and evaluation. The first line plays a pivotal role in the success and efficiency of this approach.

2017 Annual Report IRPC Public Company Limited

2 Risk assessment

The Board and the management value the significance of risk management to boost confidence in steering the organization toward both short-term and long-term goals. Therefore, the Board appointed the Risk Management Committee (RMC) and the President will be accountable in appointing the Risk Management Steering Committee (RMSC) to move forward the Company’s risk management policy in a suitable and effective manner and seriously implement risk management under the following approaches: IRPC leverages risk management under ISO 31000 and COSO Enterprise Risk Management and defines risk management policy as its guidance to alleviate possible impacts on its goal achievement. IRPC’s risk management consists of such management at the corporate level, the operating and work process level and the project level. The Company also takes into account possible internal and external factors as well as the likelihood of fraud and corruption. Risk management entails the formulation of risk management guidance and features processes designed to review risks and also consists of risk review and implementation process monitoring. All units are responsible for managing risks to an acceptable level. In addition, IRPC has applied Business Continuity Management (BCM) under the ISO 22301 international standard to its management when faced with emergencies and crises so that its business can continue uninterrupted, potential impacts can be alleviated and corporate reputation and image can be successfully maintained. 3 Control activities IRPC has defined efficient and effective control activities to minimize the risk of not achieving its goals and objectives to be in an acceptable level by setting up controlling procedures which taking into consideration good internal control principles such as segregation of duties with applicable policies and guidelines for engaging in transactions with conflicts of interest or those with potential conflicts of interest, transaction engagement with transparency and transaction approval for IRPC’s best interests. Furthermore, IRPC has established written policies, regulations and operation guidelines by clearly specifying the authority, duty and responsibility of executives and employees at every level while identifying operational steps to be employed as a guideline in its daily operation as well as regularly reviewing operation to be in line with prescribed regulations, policies, specifications and operation manual. The Company has defined IT security control processes in conformity to ISO 27001 (information security management) to strengthen confidence in the efficiency and effectiveness of IRPC’s IT system. In addition, CCMS (Continuous Control Monitoring System) has been applied to procurement and payment procedures by continually tracking and detecting irregular procurement and payment. CCMS correlates with the principle of segregation of duties and currently, this system is being developed in sales and payment processes which will be completed in 2018.

Summary of the Board

4 Information and communication

IRPC values the quality of information and communication since they are critical in supporting the effectiveness of internal control system. The Company regularly communicates with the Board, the management, employees and stakeholders with regard to significant contents of the Company’s operation result. Meeting documents will be sent to the Board prior to the meeting, so they can utilize such information to make proper decision. IRPC has set up various channels for internal communication, consisting of Town Hall meeting between senior executives and employees the Company’s intranet and electronic mail. The Company also implements channels to communicate with external stakeholders such as website, electronic mail and the Company’s facebook page. Moreover, the unit directly responsible for disclosing information to stakeholders and complaint-handling unit have been established. The whistleblower system is clearly specified so that employees and external parties can be confident that complaints will be resolved in due time and in a transparent, straightforward, fair and confidential manner.

5 Monitoring activities

IRPC has established monitoring and evaluation activities of its internal control system to ensure its efficiency an effectiveness. The Company requires executives of every level (first line) to monitor and follow-up the work process of their respective unit so that they will efficiently conform to the policies, requirements and strict regulations. Internal control and corporate risk management (second line) is responsible for reviewing the adequacy and suitability of the internal control system. If any defects are found, this second line is responsible for providing advice and recommendation in solving such defects. IRPC has instituted a process for promptly reporting any defects to executives and ensure effective and timely remedial actions. The Office of Internal Audit (Third Line) an independent unit reporting directly to the Audit Committee, reviews and assesses the effectiveness of internal control of various activities under the audit plan approved by the Audit Committee. This plan follows IRPC’s strategic directions as well as major risks affecting the business operation. The unit also provides recommendations to improve internal control efficiency and effectiveness by informing executives to take proper action. Lastly, the unit is responsible for reporting audit results to the Audit Committee as well as monitoring the progress or remedial actions until completion. Mr. Tevin Vonvanich President, IRPC Public Company Limited

2017 Annual Report IRPC Public Company Limited

Message from the Chairman, Risk Management Committee Dear Shareholders, IRPC Public Company (Limited) recognizes and highly values efficient and effective risk management across the organization to assure its stakeholders of its ability to achieve goals and the prevention and mitigation of potential losses under its business circumstances and uncertainty arising from business operation. The Board of Directors appointed the Risk Management Committee to specify policies and guidance in managing risks regarding business operation appropriately and effectively. The Risk Management Committee also defines risk management plans and procedures across the organization. The Risk Management Committee also approves the principles and financial tools regarding derivatives, including filtering and providing recommendations on risk management of investment project with technically complexed nature that may incur long-term obligation. The current Committee is chaired by Mr. Nuttachat Charuchinda, with Mr. Chansin Treenuchakorn, Mr. Ekniti Nitithanprapas and Mr. Sukrit Surabotsopon as members. In 2017, these qualified and competent directors had held 4 meetings throughout the year. Summary of the operation of the Risk Management Committee is as follows: 1. Steered and reviewed corporate risk management, consisting of identification, analysts and risk evaluation, specification of risk management measures as well as quarterly following-up and reviewing risk management result to keep risks manageable in an acceptable level, encompassing strategic risk, business risk and operational risk. 2. Provided recommendations and guidelines on risk management to the Risk Management Steering Committee that supervised and supported risk management in organizational level to comply with established policies and guidelines and the Supply Chain and Financial Risk Management Committee, responsible for monitoring and analyzing market situations, risk management in terms of price and amount of crude oil, raw materials, petroleum and petrochemical products as well as financial transactions to ensure efficient operation and risk minimization 3. Considered and provided opinions on operations that may incur risks, consisting of safety risk, occupational health risk, risks concerning environment and interrupted production process, community risk to ensure sufficient and appropriate measures in protecting lives, properties, IRPCâ&#x20AC;&#x2122;s business as well as every stakeholder group. 4. Reviewed and commented on risk management of oil transportation between different oil reservoirs and the transportation of polypropylene to customers, including related risks to ensure safe, efficient and punctual transportation as specified.

Message from the Chairman, Risk Management Committee

5. Considered and provided opinions to the Risk Management Committee regarding major projects of IRPC such as PPE project, PPC project and the Everest project, including reviewed and followed up performance results of UHV project and other extended projects. 6. Considered and provided opinions on risk management of personnel development to be in line with IRPC’s established strategies and objectives, including systematic succession plan that will not affect its business operation. 7. Provided opinions and recommendations on IRPC’s business operation in response to the policies of public sector in promoting Eastern Economic Corridor (EEC) project with the purpose to follow up, be well prepared and search for business opportunity to respond with future growth of the organization. 8. Considered and provided opinions on risk management concerning the safety of IT system by setting up the Security Operation Center and created awareness among IRPC’s personnel of safety use of IT while simultaneously preventing cyber attack of ever form. 9. Considered and commented on organizational risks 2018 before proposing for the Board’s approval in which consideration on any risk items must be relevant to IRPC’s business directions, strategies, objectives and changing environment. 10. Reviewed its own charter and added the mandate for screening significant investment projects that may incur high technical complexity, long-term obligation and other significant risks. 11. Reported its performance results for the Board’s acknowledgement on a quarterly basis. The Risk Management Committee executed its duties systematically, prudently and thoroughly with full competency, independence and alignment with corporate governance for the highest benefits of IRPC, shareholders and stakeholders.

Mr. Nuttachat Charuchinda Chairman, Risk Management Committee

2017 Annual Report IRPC Public Company Limited

Report of the Audit Committee Dear Shareholders,

IRPC’s Audit Committee consists of three independent directors who are qualified and highly experienced in fields of the energy business, finance and accounting, and law. Chaired by Mr. Somnuk Bomrungsalee, it features Mr. Jessada Promjart and Ms. Ruenvadee Suwanmongkol as members. The year saw the resignation of the former chairman (Mr. Songpope Polachan), with effect from December 1, 2017. Board Meeting No. 11/2017 of November 21, 2017, appointed Mr. Somnuk Bomrungsalee as his replacement. Undertaking Board-assigned tasks, this committee conformed to its charter, which in turn agreed with SET’s and SEC’s announcement. Its policy focuses on compliance with corporate governance, laws, and applicable regulations, and on ensuring that IRPC commands suitable, efficient, and effective internal control and internal audit systems. Meeting 11 times this year, the committee met with the management, internal auditors, and the external auditor on relevant items. The committee’s performance this year is highlighted below.

1 Review of financial reports:

The committee reviewed material data of quarterly and annual financial statements by inviting the auditor and executives of the finance and accounting function on the agenda item of financial statements consideration, where they were to clarify and address the committee’s queries about their accuracy and comprehensiveness, adjustment of significant journal entries affecting the statements, adequacy of data in the statements, and the auditor’s observation. The committee concluded that these financial statements showed essentially correct entries under financial reporting standards. The committee also held an exclusive meeting with the auditor in the absence of the management to consult the auditor about the audit plan, the internal control system, the auditor’s freedom of execution, and the auditor’s expressed views. Priority was given to the presentation of key audit matters (KAM),

2 Review of risk management:

The Board and the management valued risk management. In place was assessment of internal and external risk factors together with their respective probability and impacts. Risk management plans were prepared to prevent or mitigate potential impacts on businesses to manageable levels. Key risk indicators (KRIs) were set to track changes in various risk factors. Additional measures were defined to efficiently and promptly address changes. The Board appointed the Risk Management Committee to steer IRPC’s risk management practices, with risk management updates regularly reported to the Board. The Audit Committee reviewed risk management effectiveness through published reports. Findings examined by the Office of Corporate Internal Audit and the external auditor ensured that IRPC commanded risk management practices that supported manageable risks. 3 Review of internal control: The committee reviewed IRPC’s internal control system for the year to reasonably ensure that its business had proceeded efficiently and effectively, enabling it to achieve all objectives and goals. The review was based on the internal and external auditors’ reports, the follow-up report, and the outcomes of the assessment form of internal control against the practical guideline scope of COSO (The Committee of Sponsoring Organizations of the Treadway Commission), designed to assess the internal control system, risk management, and the credibility of financial reports. The committee’s view is that IRPC commanded a sound internal control system that was adequate for business, leading to efficient and effective performance.

Report of the Audit Committee

4 Review and oversight of internal control: This committee ensured that IRPC commanded an internal audit unit that was independent and reported directly to itself. This unit ensured effective internal audit execution in line with the approved audit plans and perused audit-related issues, while constantly providing helpful recommendations for greater efficiency of the internal audit system. The committee also regularly monitored audit outcomes and supported an information system project (Continuous Control Monitoring and Auditing System, CCMS) to screen and detect irregularities so that executives and units responsible for prevention might correct irregularities promptly. It also helps the Office of Corporate Internal Audit constantly audit work. The Procure to Pay process was first used in 2017, whereas the Order to Cash process was under development, with completion set for 2018. In addition, the committee agreed to launch a project on the assessment of internal audit quality by a third-party assessor. Besides such assessment, the objective was to recommend quality improvement approaches based on the International Standards for the Professional Practice of Internal Auditing and good practices. It was found that most of IRPC’s current practices were up to standard and no non-compliance significantly affected internal audit work. 5 Review of corporate governance: The committee focused on ensuring business performance under a sound code of conduct. To this end, it reviewed connected transactions between IRPC and related parties to prevent conflicts of interest, conform to commercial protocols, and optimize IRPC’s interests; reviewed IRPC’s complaint and whistleblowing processes for compliance with corporate governance; and ensured complete information disclosure under SET’s requirements. Finally, the committee advocated to IRPC and its affiliates membership of CAC (Collective Action Coalition against Corruption) of the Anti-Corruption Organization of Thailand.

6 Review of compliance: By reviewing IRPC’s compliance with securities and exchange laws, SET requirements, industrial and environmental legislation, and other laws applicable to its businesses, this committee found that IRPC’s internal control process was in effective compliance. 7 Amendment of the IRPC Audit Committee Charter: The committee endorsed amendment of the charter’s contents in line with the international standard on professional internal audit. The internal auditors were to adopt this guideline with effect from October 9, 2017. 8 Recommendation of the external auditor for 2017: The committee reviewed, selected, nominated, and proposed fees for IRPC’s external auditor that is independent by reviewing its qualifications, caliber, and professional skills. This year it nominated as the external auditor Deloitte Touche Tohmatsu Jaiyos Ltd. for the Board’s endorsement and the shareholders’ approval. On the whole, this year the Audit Committee performed its duties with independence, care, and prudence. It provided helpful views and recommendations to ensure that IRPC’s financial reports displayed factual, credible data; that IRPC commanded good corporate governance and legitimate business conduct; and that its risk management and internal control systems proved efficient and effective enough to yield IRPC’s optimal interests and sustainable growth. Mr. Somnuk Bomroongsalee Chairman, Audit Committee

2017 Annual Report IRPC Public Company Limited

Message from the Chairman, Nomination and Remuneration Committee Dear Shareholders, This year, the Nomination and Remuneration Committee is led by (1) Mr. Woothisarn Tanchai (Independent

Director acting as the Chairman), (2) Mr. Chavalit Punthong and (3) Miss Nuntika Tungsupanich as members (appointed on December 2, 2017). The Committee realizes its roles, duties and responsibilities while appropriately and fairly valuing the best interests of shareholders and stakeholders in relevant to corporate governance with excellence practice based on international standard as well as new CG Code, announced by SET on March 17, 2017 as a guideline for the Nomination and Remuneration Committee to be apply to suit its business with the objective to create sustainable value to its business as intended by business operation, investors, the capital market, public sector and society in general. In 2017, the Nomination and Remuneration Committee organized 6 meetings in total and also set up its charter by adhering to recommendations and guidelines of IOD, coupled with new CG Code. The Committee agreed that the nomination of directors who possessed high qualification and good governance is a major factor influencing effectiveness and efficiency of IRPC’s sustainable growth and result in personnel’s performance at every level to move forward in the same direction based on corporate governance, direction with responsibility towards society, environment and stakeholders. In fulfilling its 2 major missions; namely, the nomination of directors and the sub-committee as well as the specification of remuneration of directors and the President in 2017, the Committee performed such duty with careful consideration and with complete information as a reference for decision making to propose to the Board for their approval. The Board approved and accepted agenda items as proposed by the Nomination and Remuneration Committee as reported to shareholders via SET channels throughout the year. In reviewing the compensation of directors, the Nomination and Remuneration Committee considered the best interests of shareholders in an appropriate proportion and employed such factor in determining the compensation of its directors. The Committee proposed the previous compensation rate approved by the shareholders since 2006. The specification of compensation components and objectives of performance assessment of the President, the Committee applied all factors with fairness in setting an overall performance based on corporate KPI at 70 percent. Factors supporting sustainable growth of IRPC include responsibility towards society and community, transparent operation leadership and ability to cope and resolve various problems of the organization with fairness which in turn will have a positive impact on IRPC’s image and the credibility of every group of stakeholders. In 2018, the Nomination and Remuneration Committee plans to develop guidelines on specifying compensation with highest benefits to IRPC, shareholders and stakeholders. The Committee will remain committed to performing its tasks transparently with full efficiency for the organization’s sustainable development.

Mr.Woothisarn Tanchai Chairman, the Nomination and Remuneration Committee

55 Message from the Chairman, Corporate Governance Committee

Message from the Chairman, Corporate Governance Committee Dear Shareholders,

In supervising IRPC Plc’s business, the Corporate Governance Committee applied SEC’s modified Corporate Governance Code (CG Code), seen as suitable for the corporation’s business context, for maximum efficiency. Quarterly monitoring is done to review and intensify corporate governance practices at IRPC; this committee reports the outcomes to the Board of Directors. A five-year CG roadmap compatible with IRPC’s vision and strategies is in place. Major policies and operating plans for this year were laid out in advance, equipped with Board concurrence. The committee also prudently reviewed risks concerning its CG image and reputation before identifying accommodating measures. Finally, IRPC has allocated suitable resources and supports essential activities, valuing innovations and technology promoting socio-environmental responsibility. Below are the highlights of CG performance this year. Upgrading of directors’ roles and responsibilities: The Board received a briefing on “CG Code 2017”, designed for new listed companies, and applicable laws on Board responsibility, aimed to stress their awareness and understanding of their proper roles and responsibilities. Director training was staged on directors’ and the management’s duties under a new law on market misconduct, civil penalty, and class action. Also, directors were encouraged to individually attend IOD’s training courses. Orientation was provided for incoming directors, who received adequate information for their job performance. And finally, the Board endorsed this committee’s charter as well as that of the Nomination and Remuneration Committee, both revisions with wider scopes of mission. Policy and activities promoting good governance and sustainable growth: The Board defined a global corporate citizen policy under UNGC’s guidelines together with a human rights policy on business conduct. In March, IRPC won its second CAC certification renewal; another IRPC Group company earned its inaugural CAC membership this year. Concerning compliance, IRPC completed its Corporate Compliance Framework and began staging its workshop for the first group of executives and staff whose jobs closely involved assorted regulations, including financial units and oil market units. Finally, this committee updated its CG manual in line with CG Code 2017 and emerging Board-defined policies. Stakeholder stewardship: IRPC thoroughly preserves shareholders’ lawful rights while treating shareholders equitably by disclosing its information clearly, transparently, and regularly through its communication channels and SET’s venues. Through the year, its executives provided information to the public and investors in general through the mass media and analyst meetings. As for other stakeholders, IRPC ensured that they duly benefit, fostered good relations with them, and established networks of participation with a commitment to good governance and responsibility to communities, society, and the environment. In addition, IRPC promotes employees’ CG awareness and volunteering spirit for public service, with directors and executives providing role models. The Corporate Governance Committee is determined to foster strong work ethics among IRPC’s executives and employees under everyone’s cooperative spirit, which would automatically give IRPC an image of trustworthiness and acceptability from all stakeholders. For then it could achieve business goals in parallel with the balanced stewardship of communities and society-including the goal of being a good global corporate citizen.

Mr. Anusorn Sangnimnuan Chairman, Corporate Governance Committee

2017 Annual Report IRPC Public Company Limited

Corporate Governance Report The Board of IRPC Public Company (Limited) has constantly valued good corporate governance and strives to operate its business with transparency which can be inspected as well as adhering to the intention to create value for every stakeholder group, together with the Company’s growth while elevating people’s quality of life, including that of society and environment. In 2017, IRPC was awarded an Honorable Mention Award of transparent organization category 2017 from the Office of the National Anti-Corruption Commission (NACC) for 2 consecutive years and was rated at an “excellent level” with the score of 96/100 in an evaluation of survey project for CGR in 2017, presented by Thai Institute of Directors (IOD), which was considered higher than the scores of 2015 and 2016 with 92 and 94 scores respectively. Apart from corporate governance awards, IRPC also emphasizes on sustainable performance results, anti-corruption, social and environmental responsibility as prescribed by national and international standards. Details can be seen in the award and success section on page 14-17.

In 2017, the Board of Directors employed good corporate governance of SET 2017 (CG Code) as performance guidelines in parallel with 5 sections of CG Code and reported directly to shareholders on an annual basis. Consequently, this CG report 2017 has explained performance results based on new CG Code and 5 sections of CG guidelines.

Corporate Governance based on CG Code 2017 of SET

The Board of Directors realize that the significance of an ability to adapt amidst different changes in the business world and petrochemical industry by adhering to business ethics and social responsibility that ultimately enable long-term

Corporate Governance Report

competitiveness of IRPC. The Board has adapted CG Code 2017 prescribed by SET as guidelines for monitoring, following up, revising and improving the operation of the Board and the management in which “Board That Makes a Different” strategy was efficiently and concretely put in place. Major operations in 2017 can be summarized below: • Recognition of roles and responsibility of the Board as the leader of an organization that creates sustainable business value The Board organized meetings as planned in 2017 for the total of 12 meetings. Directors attended the meetings at the average of 96 percent throughout the year and performed their duty with full responsibility and capability. Directors studied information relating to meeting agendas proposed by the management in advance. During meeting sessions, directors expressed their opinions independently and also took part in consulting, analyzing, exchanging ideas as well as inquiring the management with different perspectives of knowledge and experience until no further questions are left to be asked and sufficient information derived before voting. Besides, the Board fostered a good relation with the management and expressed their leadership by providing recommendations and support

the management in solving operation problems of IRPC such as problems relating to the community’s complaint in which the directors visited the problem area in Rayong province to participate in the community activities, to acknowledge the true condition of the problem while expressing their sincerity and intention to help solve such problem and also encouraged the community’s involvement. The Board strongly realizes the significance of the issues in question, whether money is involved or not, including other issues affecting IRPC’s reputation and image, the stakeholders’ trust and confidence and factors having an impact on corporate governance and environment. In considering meeting agendas and specifying important policies, the Board must ensure that they can appropriately respond to the objective of value creation of IRPC and the business operation must conform to the strategic plan established by the Board. If any changes do occur, explicable reasons and necessities for an overall success of the entire organization. • Promotion of innovation and responsible business operation In specifying important business policies and the approval of investment plans, IRPC strives to utilize its assets for highest efficiency as well as investments in

Board of Directors visited "Model Plant" a part of EVEREST Project's success, which was the improvment of planning tools and process for higher effieiency.

2017 Annual Report IRPC Public Company Limited

the new asset which create added value to its business and maintain quality of the environment; for example, the investment on product transformation for use as raw materials of petrochemical purpose that yields higher ROI such as UHV project and PPE/PPC project, the investment on research and development of catalyst to extend the product’s life cycle and minimize costs. In addition, the Everest project was established with the purpose to increase production and maintenance efficiency, production planning, procurement of raw materials and equipment as well as personnel development that ultimately create higher revenues and benefits as intended while continued projects have been set up to maintain such strength. The Board values innovation while elevating the importance of research and development center and allocating appropriate budgets to this center at the amount comparable to other leading industries. IRPC also aspires for an invention of high-quality products which help reduce environmental impact to the lowest level as well as minimizing the consumption of natural resources both in terms of materials and energy employed in the manufacturing process. • Maintenance of financial credibility and information disclosure As for fund raising activities for investments in various projects, the Board will consider factors as prescribed by law and will maintain its financial credibility, financial proportion as referred from standard practice accepted by leading companies and credit rating institutions in an international arena. IRPC has meticulously specified its filtering procedures such as marketing risk, world’s economy, financial market, exchange rate, interest rate etc. • Specification of goals and objectives of the business for sustainability (society and environment) The Board cooperatively prepares an annual STS to identify long-term business path of the organization and to build a strong foundation to respond to changing situations whether they will be risks or business opportunities that might come in different types. Apart from the financial perspective, IRPC also emphasizes on three other dimensions promoting sustainable growth and development; namely, stakeholders’ perspective, internal process perspective and learning

& growth perspective. IRPC realizes the importance of the quality of life of employees, community and overall society, both inside its facilities and surrounding areas of its business operation. IRPC also specifies a high level of safety, sanitation and environmental standard as required by law. IRPC has also established OEMS to achieve its desired objective as an entrepreneur with excellence on operation, ethics, social and environmental responsibility and good corporate citizen. IRPC has consistently participated in various activities aiming at sustainable development in line with SDGs17 and developed IRPC to be acceptable and become one member of DJSI in emerging markets group of oil and gas industry for 4 consecutive years. IRPC also participated in UNGC and was a founding member of GCNT that constantly strives to create a quality society based on 4 dimensions of an agreement with UNGC, especially in the area of ethical business operation, solid anti-corruption policies and guidelines while simultaneously participating in an expansion of anti-corruption network with the society. In 2017, IRPC had implemented human rights policy and promoted such campaign alongside the environment in the project concerning responsible plastic consumption with its shareholders during shareholders’ business visit 2017 in Na Klue community, Pattaya in “Doen Kin Tin Na Klue” etc. • Supervision of appropriate risk management and internal control systems The preparation of strategic plan shall be scrutinized relevant to brainstorming procedures and risk evaluation, including sufficiency of internal control, risk management plan and Business Continuity Management (BCM) plans to ensure that IRPC has been efficiently prepared for different circumstances. Afterwards, the President and senior executives (not the same person as the Chairman) shall accept clear strategy, objectives and indicators of which the results can be concretely evaluated. Objectives, indicators and evaluation criteria of senior executives’ performance shall also be specified for effective synchronization to support an overall operation to achieve its mission and to fairly evaluate performance and remuneration. The budgeting system and information technology

Corporate Governance Report

for business operation such as purchasing system, accounting, finance and budget, fast CCMS system with real-time inspection of every step can be employed in monitoring, following up and reviewing performance results for the highest benefits of every related business partners in the supply chain. In addition, performance results will be reported to the sub-committee and the Board at the appropriate deadline which suits the type of operation to be responsive to a specific situation in case any revision or improvement is necessary. Furthermore, the specification of policies, monitoring of the Company’s subsidiaries, including other businesses IRPC has invested shall be in compliance with guidelines defined by the Board and must be approved by the director of any authorized individual identified by the Board and also indicated in CG Code. The Board shall specify report on performance progress on a regular basis and at appropriate time to revise operation plan in due time. • Support of participation and communication with shareholders IRPC strongly adheres to SET’s regulations. Information disclosure in terms of performance results, progress or any events of the Company will be proceeded with great care and caution. Information disclosure must be performed via SET Portal in a suitable timing for shareholders. Meeting with analysts, institutional investors, media and other relevant individuals must be appropriately executed. In addition, IRPC has regularly participated in various activities

with SET in order to foster growth and confidence of the capital market and economic system of the country. • Selection and development of senior executives and personnel management IRPC realizes the importance of human resource management; therefore, the Company has established a systematic administration policy which is fair, equitable and comparable to other leading international industries. IRPC also stresses on developing efficiency, fostering corporate culture by instilling what is called “IRPC DNA” to build employees to become a major driving force of IRPC in the long run. IRPC also set up the talent management and succession plan as well as develop its personnel with PTT to broaden the executives’ vision. • Strengthening the effective Board The Nomination and Remuneration Committee is responsible for nominating directors as obliged by its charter to appoint directors with appropriate qualification, knowledge and experience (Board Matrix) which, in turn, will facilitate performance integration more efficiently and effectively, achieve defined objectives, respect human rights and no discrimination owing to differences. Throughout 2017, the Board’s performance evidently illustrates their responsibility and dedication by regularly attending the Board’s meetings (information of the Board’s meetings). During meeting, the Board can freely express their opinions while striving to foster good relationship with the management. The Board possesses different perspectives of knowledge, experience and

2017 Annual Report IRPC Public Company Limited

BOARDS THAT MAKE A DIFFERENCE 1. To maintain excellence standard and the Effectiveness of IRPC Board of Directiors 2. To perform the leader role in Policy Governance

BOARD PORTAL

INNOVATIVE APPROACH TO EFFECTIVE GOVERNANCE HOW’S THE DIFFERENCE?

BOARD-STAFF RELATIONSHIPS

DESIGN CEO ROLE AND PERFORMANCE MONITORING By John Carver

EMPOWERING AND FUNDAMENTAL REDESIGN OF THE BOARD ROLE

EMPHASIZE VALUE, VISION AND EMPOWERMENT OF BOTH THE BOARD AND STAFF

STRATEGIC ABILITY TO LEAD LEADERS

• Well organized information • Board responsibility • Data Govermance • Board Assessment (Internal and Third party)

“The governance world is changing so rapidly that we cannot afford to get behind.”

qualification while retaining necessary business elements of large companies. Every sub-committee shall perform self-evaluation annually for future improvement. In 2017, IRPC organized a training program and seminar for the Board under the topic of “Duties of directors and executives” within new legal principle regarding market misconduct, civil penalty, class action, presented by IOD’s speaker and held on September 19, 2017 before the Board’s meeting took place. In addition, there were 3 directors attending “Board’s Role in Strategic Leadership”, hosted by IOD. The Board received adequate information for the meeting and other necessary information through "IRPC Board Portal Website" The President possesses solid knowledge, expertise and experiences accepted in the petroleum and petrochemical industry, coupled with a broad vision and strong leadership skill, well qualified to move the organization towards its growth and development. The President is also the Chairman of Thailand’s Petroleum Refining Industry. The Board agreed to revise the company’s charter for two sub-committees; namely, the Nomination and Remuneration Committee and the Corporate Governance

Committee to encompass broader missions, to enhance effectiveness of directors’ operation to be in line with the business type as well as be compatible with SET’s guidelines and international standard. The Company Secretary is appointed by the Board. He/she shall possess knowledge, expertise, experience and qualifications that can support necessary information to the Board in an efficient and satisfactory manner. (Details shown in“Management Team” page 46).

Activities and good corporate governance operations of IRPC in 2017

The Board has consistently monitored the Company to perform its business in conformity to good corporate governance which can be summarized as follows: 1 Shareholders’ rights The Company realizes that shareholders are the owner of IRPC; therefore, the Company has granted them with all aspects of rights as prescribed by law and IRPC’s regulations; for example, right in attending the shareholders’ meeting, right to express their opinion, voting right, right to propose the meeting agenda

Corporate Governance Report

before the actual meeting date, right to nominate or remove any directors, right to consider remuneration for directors and auditor, right to consider the sharing proportion of benefits/ dividends and right to access adequate and complete information via different channels to facilitate the shareholders’ decision making. AGM with shareholders IRPC has specified an annual AGM with shareholders within 4 months from the end of the accounting year of the Company and in case when any emergency arises that it requires the resolution or when such urgent matters may affect interests of shareholders or related to conditions or regulations prescribed laws that require the shareholders’ approval. The Company will arrange for extraordinary shareholders’ meeting on a case by case basis. In 2017, the AGM date was April 4, 2017. Before the Meeting The right in attending the 2017 AGM and the right in receiving dividend must be in compliance with the Securities and Exchange Act B.E.2535. IRPC will communicate and publicize details of the 2017 meeting via IRPC newsletter, issue no.23/2017, Thai version with translation. Such newsletter will be delivered to every shareholder, coupled with the meeting invitation as well as encouraging shareholders and institutional investors to attend the AGM to exercise their rights and to be informed of the Company’s performance directly from the Board of Directors. February 14, 2017 • The Board’s resolution on the record date is March 1, 2017 and the 2017 AGM will be held on April 4, 2017. • The Company will inform the Board via information dissemination system of SET as well as the Company’s website. February 24, 2017 • The closing date of registration book to compile lists of shareholders who are entitled to attend the meeting and receive dividend. March 1, 2017 • Date specified the right to attend the 2017 AGM and right to receive dividend (record date)

March 3, 2017 • Submit the complete version of meeting invitation, including meeting-related documents, both Thai and English on www.irpc.co.th 30 days prior to the meeting March 13, 2017 • Mail the meeting invitation to shareholders (via registered mail), performed by TSD 21 days prior to the meeting March 20-22, 2017 • Publicize details of the 2017 AGM via daily newspaper, both Thai and English (stock newspaper and the Bangkok Post) for 3 consecutive days prior to the meeting April 4, 2017 • The 2017 AGM will be held at 9.30 hours at Bangkok Convention Center, 22nd floor, Centara Grand Hotel and Bangkok Convention Center, Central World, 999/99 Rama I Road, Pathumwan district, Bangkok 10300 • IRPC gives the right to every shareholder with a combined 4 percent or more, higher than 5 percent prescribed by law, to propose agenda items for the 2017 AGM and nominate directors in advance during September 20, 2016 and January 31, 2017. Nonetheless, no additional agenda items nor nomination of directors was proposed in the 2017 AGM in advance. • As for the quality of the meeting invitation, IRPC had clearly specified 7 agenda items for the 2017 AGM (there were no agenda items for adoption of the minutes of the previous meeting since IRPC had sent them to the shareholders on April 20, 2016 – May 31, 2016 for their review, objection or amendment. No shareholders had objected to the meeting minutes; therefore, they were automatically adopted). For each agenda item, reasons and opinions of the Board were stated as explained below: - Acknowledgement of the 2016 performance and approval of IRPC’s 2016 financial statements had been audited and certified with no further conditions by an authorized external auditor (page 2) - Approval of dividend payment for the 2016 performance. IRPC disclosed its dividend payment policy and successfully maintained

2017 Annual Report IRPC Public Company Limited

suitable financial liquidity in line with its business operation, with categories and sources of retained earnings from which the dividends to be paid, proposed dividend rate, dividend payment date complete with clear rationale and data for consideration. Details have been clearly highlighted on pages 2-3 of the 2017 AGM meeting invitation. - Appointment of directors to replace those who completed their terms. IRPC provided directors with complete information encompassing name-last name, age, education background, work experience and previous positions of each director to be appointed so that the shareholders would have sufficient information for their consideration. Details are further explained on pages 16-27 of the 2017 AGM meeting invitation. - Specification of directors’ compensation for 2017. IRPC proposed a policy for directors’ compensation; namely, retention fees, meeting fees and bonuses. Besides, no other compensations or benefits had been given to directors. Details are explained on pages 7-8 of the 2017 AGM meeting invitation. - Appointment of the external auditor for 2017. IRPC stated details and information of an external auditor such as the auditor’s name,

company, experience and expertise, including other issues regarding his/her independence, audit fees and non-audit fees together with other services provided. Details were given in full and clearly on pages 8-9 of the 2017 AGM meeting invitation.

Meeting day • IRPC’s 2017 AGM was held on April 4, 2017 at 09.30 hours at the Bangkok Convention Center, 22nd floor, Centara Grand Hotel and Bangkok Convention Center, Central World, no.999/99 Rama I Road, Pathumwan district, Bangkok 10330, under the “Green Meeting” concept to keep up with the standard certified by Thailand Business Council for Sustainable Development (TBCSD) and Thailand Environment Institute (TEI) for 5 consecutive years. • The meeting was held at a convenient meeting venue for public transport (BTS and buses) with spacious parking lots and efficient security system, including officers who will attend to help with any inquiries and registration. Sufficient registration points were also arranged, with registration process starting 2 hours prior to the meeting of which the shareholders were informed in the meeting invitation. The barcode system was leveraged during registration and vote-counting procedures for higher efficiency, accuracy and speed. In addition, IRPC facilitated

Corporate Governance Report

proxy-giving by making free duty stamps available for legal completeness of all documents. IRPC also organized an exhibition near AGM meeting rooms which consists of the following: • Exhibitions regarding work plans and significant operations of IRPC such as: - The progress and performance outcome of the Everest Project - IRPC’s role as a good corporate citizenship in operating its business in compliance with SDGs 17 - An establishment of Global Compact Network Thailand in cooperation with 15 leading organizations in Thailand • IRPC Innovation Product Bazaar was introduced to provide a channel for manufacturers, one of IRPC’s customers, to meet directly with customers and to offer them with special price products such as luggage made of green ABS with natural rubber or plastic boxes using natural colors from fruits and vegetables for maximum safety etc. • Booths to introduce foundations and social organizations which are IRPC’s alliances (for example, Pediatric Cardiac Surgery Foundation and Her Royal Highness the Princess Mother’s Prostheses Foundation) and to encourage IRPC’s shareholders to donate and present their kindness to other disabled or underprivileged persons in order to improve their quality of life. • IRPC realizes the importance of AGM; thus, the meeting began as scheduled with the Chairman of the Board served as the Chairman of the meeting. In attendance were the sub-committee chairs, directors and the President, together with senior executives and the Company Secretary. (complete details of the meeting were record in the AGM minutes and disclosed on IRPC’s website). A total of 15 directors or 100 percent of the Board attended the meeting. • IRPC requested an independent legal advisor from Weerawong Chinnawat and Partners Company Limited (Ms.Phiangphanor Boonklum and company) to ensure that the AGM was legitimate and provide legal information as needed. The external auditor attending the AGM 2017 was Mr.Wichien Kingmontree, CPA no.3977, Pricewaterhouse

Coopers ABS (PWC). IRPC also arranged for verifiers to verify the votes and serve as a neutral party in vote tallying, namely Miss Pranisa Suksomboon and Miss Woraporn Porapaskham, volunteer from the shareholders in attendance. • Before starting the meeting agenda, the Chairman clearly informed the meeting about voting method and vote tallying. IRPC issued only one class of shares in which one share equals one vote. • On the agenda of directors’ appointment, IRPC allowed the shareholders to vote for directors individually with an individual name on the ballot. Directors with vested interests would leave the meeting on the agenda items in question. For this meeting, five directors with vested interests; namely, Mr. Somnuk Bomrungsalee, Mr. Ekniti Nitithanprapas, Mr. Anusorn Sangnimnuan, Mr. Jessada Promchart and Mr. Woothisan Tanchai left the meeting room until deliberation and voting were completed. • During the meeting, the Chairman allowed the shareholders to exercise equal rights in asking questions or giving comments at the AGM while allocating sufficient time and asking related directors to provide them relevant data until no further questions were asked. IRPC arranged for ballot casting and ensured that all ballots were collected and inspected the voting results and recording of votes from the ballots. To achieve higher efficiency and speed, the barcode system was employed

2017 Annual Report IRPC Public Company Limited

to record and calculate voting results. Meeting resolutions were announced clearly for each and every agenda item, together with the numbers of yes, ho or abstained votes which would be displayed on the projector for clarification. • The Chairman strictly conducted the meeting based on the sequence given in the meeting invitation. No other agenda items were added apart from the topics listed in the meeting invitation.

After the meeting • IRPC disclosed the resolutions of the 2017 AGM for each agenda item both in Thai and English via IRPC’s website and SET Portal on the meeting date (April 4, 2017) after the meeting was completed. • As for the quality of meeting minutes, IRPC recorded complete meeting minutes which include contents of the meeting, lists of directors and senior executives attended the meeting, questions of shareholders as well as clarifications of directors and executives on each question, meeting resolution and voting results for each agenda item, complete with details of yes, no and abstained votes on each voting agenda item. • IRPC made available the minutes of 2017 AGM on SET’s and IRPC’s website on April 18, 2017 (14 days after the meeting). IRPC newsletter, special issue, volume 23/2017 was published and mailed to every shareholder on April 24, 2017 and also notifying them to forward any amendment or disagreement points to the Company Secretary by May 31, 2017. At the end of such period, if no shareholder objected the meeting minutes; therefore, such meetings were considered final. 2 Equitable treatment of shareholders IRPC pledges equitable treatment of all shareholders together with strict compliance with corporate governance principles. The 2017 business operation can be summarized below: • IRPC issued only one class of shares • IRPC provided the opportunity for one or more shareholders with a combined 4 percent or more of the eligible voting shares to propose agenda items and nominate directors in advance from September

20, 2016 to January 31, 2017. IRPC also publicized clear criteria and procedures on its website and notified shareholders via SET’s news channel. • IRPC disseminated meeting documents on its website both in Thai and English 30 days prior to the meeting date and mailed these documents to all shareholders 21 days in advance (March 13, 2017). • In case any shareholders could not attend the meeting, IRPC would facilitate by sending proxy forms (Form A and Form B) together with the meeting invitation to such shareholders. The form would state the documents, evidence, advice and proxy procedures to accommodate the shareholders in their preparation and their proxy in attending the meeting. Shareholders could assign the proxy to attend the meeting and vote on their behalf under one share per vote by filling the proxy form as explained in detail and without complicated criteria in the proxy procedure. In addition, the shareholders could download the proxy forms, form A, form B and form C from IRPC’s website. Nonetheless, IRPC submitted the names of the independent directors who had no vested interests in the meeting as proxies for shareholders, namely (1) Mr. Songpope Polachan and (2) Mr. Pramual Chanpong • IRPC established a policy of no trading of securities 45 days ahead of the disclosure of financial statements and 2 days after such disclosure. IRPC would ensure that directors and executives would strictly comply to SEC’s criteria. • IRPC set up a written policy and guidelines to keep and prevent the use of inside information and notified all employees to strictly conform to. Directors and executives were legally responsible for reporting portfolios and regularly submitting a report to directors for acknowledgement. In 2017, IRPC’s directors and executives were not reproached or warned by SET on selling shares by employing inside information. • IRPC prepared a report of security holding by directors and executives and also specified that directors and executives must accurately and completely comply with SET’s and SEC’s rules and regulations. IRPC submitted this report to the Board for acknowledgement on a monthly basis. IRPC has never received such warning from the regulatory body.

Corporate Governance Report

• In 2017, the Board together held no more than 25 percent of IRPC’s issued and paid-up shares, with a total shareholding of 0.04185 percent (as of December 31, 2017) • According to SET’s criteria, such transactions were not normal business and procured with comparison with other companies. The Audit Committee must screen them before submitting them to the Board for transparency and fairness to all relevant parties. The Board approved related transactions by taking into consideration the best interests of IRPC and transparently reported/ disclosed such transactions as prescribed by SET’s regulations in an annual financial report. (Details shown in "Connected Transaction” page 139) • When directors change or assume new positions, the latest information must be submitted to SEC for acknowledgement. • IRPC had not provided any financial assistance to companies that were not its subsidiaries. There was neither cross-sharing in IRPC’s group nor share repurchasing. • IRPC stipulated that all executives and employees, including those of its subsidiaries must report every transaction of possible conflicts of interest with IRPC via on-line system for 3 consecutive years, apart from the report made by directors and executives as specified by SEC. This report is to raise awareness of transparent, fraud-free operation which must be submitted to the Corporate Governance Committee.

3 Roles of stakeholders

IRPC values the rights of all stakeholders by clearly specifying policies and treatment guidelines for each stakeholder group in its corporate governance handbook and considered them as part of IRPC’s strategic plan and operation. IRPC has determined KPI to facilitate clear evaluation and performance assessment. Every stakeholder will be fairly and equally protected whether they will be employees, executives of IRPC and its subsidiaries, including external stakeholders.

Treatment of stakeholders will be described below:

Shareholders/ investors IRPC is committed to perform its business operation which results in good performance, steady growth, competitiveness by taking into account major risks on current and future business to increase long-term value for shareholders. Consequently, IRPC is responsible for disclosing information by adhering to transparency and fairness while forging good relationship and focusing on communication with shareholders/ investors via numerous channels and activities such as: • Arrange shareholders’ visit of IRPC’s business operation in Rayong province on November 16, 2017. On this occasion, IRPC together with the shareholders, organized an activity to instill knowledge to children in Rayong province by giving the signboard to encourage

2017 Annual Report IRPC Public Company Limited

Analyst Plant visit to RDCC Plant.

the use of plastic with responsibility and social conservation to schools attending the project, consisting of students from 15 schools (5 districts) located near IRPC’s facilities; namely, Wat Tapong Nok School, Wat Yaida School, Wat Chang Chin Sirirat Bumrung School, Baan Nern Sao Tong School, Wat Baan Don School, Baan Nong Jok School, Wat Koh Kloi School, Wat Pluak Kade School, Wat Baan Laeng Community School, Ta Krao Thong School, Wat Natakwan School, Baan Chawuek School, Baan Kao Wang Marn School, Wat Nam Korn School and Satit Municipal Rayong School. • Communication via printed media, radio, television, on-line activities with stakeholders and other public relations channels such as quarterly newsletters to keep shareholders informed of IRPC’s operations and major activities. • Arrange regular meetings with investors and analysts in Thailand and abroad (more details will be described in information disclosure and transparency section). • Information disclosure to the public via news conferences and various media channels throughout the year.

• IRPC prepared an integrated report in conformity to IR framework which focuses on the treatment of stakeholders. The report was easy to understand and suitable for communication with extensive target groups and publicized on IRPC’s website.

Customers/consumers IRPC believes that customers’ satisfaction and confidence are very crucial. IRPC; therefore, committed to offering products with quality and safety through innovations to develop excellent and environmental friendly products based on international standards. IRPC is also committed to disclosing marketing information to its entirety with accuracy and completeness without covering or distorting facts as well as to develop efficient information technology in responding to the requirement of customers in a timely manner. IRPC’s IT system helps facilitate the management of the entire chain of data from purchasing and placement of order, payment, work order monitoring to product delivery. IRPC also provides consultation, recommendation, technical solutions as well as organizing customer relation activities. Details are listed in “Market Situation and outlook” page 135.

Corporate Governance Report

Business partners

IRPC treats every business partners with equality and fairness which is in line with honest and transparent business competition while taking into account mutual benefits, developing and maintaining sustainable relationship, confidence and trust with its business partners. IRPC also adheres to procurement excellence policy under the Everest Project in which the Company’s consultant has applied the best practice within the organization on the treatment of business partners as required by law and procurement contracts that are in compliance with the standards recognized by leading industries. IRPC is strongly committed to anti-corruption policy, money-laundering by registering approved vendors, manufacturers and a contractor list with efficient, accountable procurement and Procurement Web Portal which is the channel for communicating information and news regarding procurement such as bidding, e-sourcing (RFP, RFS), evaluation (AVL, ACL) which will facilitate business partners in terms of convenience, speed, transparency and accountability in all procedures. IRPC also organizes activities to foster good relationship with business partners. Activities will be described below: • IRPC invited 19 business partners to attend “PTT Group CG Day 2017”, hosted by PTT Group to promote its business partners to acknowledge, be informed and conform to IRPC’s operation guidelines pertinent to corporate governance, business ethics and anti-corruption policy. • IRPC organized “Supplier Recognition & Appreciation Day 2017” to express its sincere gratitude to business partners and contractors, considered as an important part of the overall success of IRPC’s Annual Maintenance 2017 activity. On this occasion, IRPC granted an honorable reward to business partners and contractors who passed an evaluation test based on environmental, social and corporate governance criteria (ESG), including those who value sustainable operation. On this day, IRPC also communicated significant information regarding business ethics, human rights policy, labor rights policy and guidelines on safety, occupational health and environmental responsibility for strict compliance of business partners and contractors. • IRPC arranged a training session on the evaluation of business partners based on ESG criteria.

IRPC selected major business partners to participate in such training by allowing them to complete self-assessment test by themselves for better understanding before an on-site audit takes place. This training is considered part of a cooperation between PTT Group companies with the purpose of sharing information and inspecting their major business partners in the area of environment, society and CG which will ultimately minimize IRPC’s operation expenditures as well as strengthen good relationship with these business partners for sustainable growth and development. Competitors IRPC manages its business under a code of conduct and ethics regarding the treatment of competitors. IRPC has established a control system to ensure that it will not use competitors’ trade secret for its own benefit through any dishonest means. IRPC will not tarnish competitors’ reputation without factual data and information. Creditors IRPC has set up a policy and practices regarding treatment of creditors, especially guarantee conditions, capital management as well as establishing policy regarding non-compliance of contracts by strictly complying to contracts under creditors’ stipulations. Employees IRPC realizes the importance of equitable treatment of all employees regardless of their gender, nationality, race, religion or belief. The employees are considered as a major driving force of the organization to achieve its business success. Therefore, IRPC promotes continuous development of employee’s skill and expertise under the project called the “Everest” to ensure that its employees are well-equipped with potentials comparable to other leading companies in the same industry. IRPC has specified suitable and fair compensation and welfare to retain high quality employees in the long run. In addition, IRPC has consistently fostered a favorable and pleasant workplace and environment by focusing on employees’ right, safety and occupational health across the organization. IRPC also respects employees’ personal rights by developing numerous methods as follows:

2017 Annual Report IRPC Public Company Limited

• IRPC conducts an annual survey of employees’ engagement. Survey results will be used to formulate work plans across the organization to increase employees’ engagement with the organization through activities and continuous work plans and incorporates into KPIs of the executives. From the survey in 2017, IRPC was ranked in the first quartile. Further details will be in the report of Human Resources Administration on page 168-170. • IRPC sets up performance management system (PMS) of employees with specific sets of KPIs for equitable performance evaluation. A salary structure comparable to other companies in the same industry to retain quality employees. IRPC has specified promotion criteria which are fair and explicable to everyone alike, with specific sets of knowledge and capability for each job which can be used to design proper training and development programs for each employee. • Knowledge and capability development - Identify human resource policies and guidelines by systematically developing the handbook of “Human Resource Management Policies and Guidelines” in a written form to communicate to employees for their acknowledgement and better understanding of policies, procedures and regulations including employees’ remunerations. - Develop training and development policies for employees through “Handbook of learning and development” to be employed as a tool

and guidance in managing employees’ development. IRPC has identified criteria and standards for its training needs for every employees and executive which comprise of 4 main categories which are management, safety & environment, quality & productivity and technical, including courses in business code of conduct and anti-corruption policy. Moreover, IRPC had encouraged supervisors and employees to jointly prepare individual development plans (IDP) to fit individual needs for development. IRPC has set average training hours per employee per year for each level and also discloses such statistic in its SD report. • Communication and activities with employees - IRPC has implemented the communication system in both forms of “top down” and “bottom up”. The meeting of Management Committee is held weekly while that of the Vice-President level is held on a monthly basis. Moreover, “The President Townhall” activities will be held quarterly and whenever any critical need for communication arises. The objectives of such activities are to communicate operational results, policies as well as IRPC’s directions to employees while allowing them to ask questions and exchange opinions. The activity is held in a conference room with video broadcast to cover all office areas for two-way communication via IRPC’s

Corporate Governance Report

intranet. Besides, Employees Committee is another forum where employees can systematically communicate their request or requirements in which the President acts as the chairman of such meeting. - With full attention on the rights and benefits of all employees, the President always chairs the Employees Committee to efficiently develop resolutions agreed by both employer and employees in a timely manner. IRPC also supports various activities of IRPC’s 8 labour unions. - The President, executives and employees have attended an annual retirement party to honor and encourage employees who have devoted themselves to IRPC while fostering good model for corporate culture. • Compensation and welfare of employees - IRPC has developed a compensation policy conforming to work performance both in the short-term and long-term. The review process is appraised with assessment of agreed KPI and competency at an organizational, business unit and individual levels, starting from the beginning of each year. Variation bonus is also granted to senior executives in proportion to specific achievements. - IRPC has improved its welfare structure such as medical fees, rental fees and non-resident allowances to retain quality employees with the organization as well as promoting and upgrading the quality of life of employees. - IRPC has organized a provident fund for the long-term welfare of employees, with higher corporate contribution than legal requirement and exponential to service years. Employees are given sufficient information and training with options for appropriate investment depending on an individual’s need for maximum return and investment’s flexibility. - IRPC has organized an annual recognition service years awards for employees with 10, 20 and 30 service years. - IRPC consistently promotes and fosters awareness among its workforce to recognize commercial patents and intellectual property.

Several campaigns were organized to remind employees to fully comply with the Copyright Act B.E.2537. IRPC also published its policy on standard practices for its computers and computer networks, including good operation practices to prevent employees from using illegal computer programs and software. Periodic reviews and monitoring are set up to prevent any infringements. - An internal audit is responsible for monitoring and auditing any violations on the use of copyrights owned by IRPC and to protect and optimize IRPC’s intellectual properties. Community and Society IRPC realizes its role as a good citizen while incorporating itself to community and society with the responsibility of assisting them, supporting community services and developing sustainable quality of life. Community and social programs on public health, education, religion, culture and quality of life which can be summarized in “Corporate Social Responsibility Project” page 192-201.

2017 Annual Report IRPC Public Company Limited

statements and important operation of IRPC via SET channels. • IRPC prepared the 2016 Annual Report illustrating financial statements and significant operation information which were unconditionally approved by the auditor and IRPC has never been ordered by SEC and SET to rectify its financial statements. • Disclosure of transactions or agreements between shareholders with significant impact on other shareholders or IRPC. Mangrove Reforestation project to protect waves in collaboration with Chumporn • IRPC prepared reports Nation Park in compliance with international standards Environment and natural resources - IRPC prepared Corporate Sustainability IRPC has consistently acted as a good citizen, Report 2016 to communicate guidelines of management taken into account the responsibility for the and performance results in terms of economics, social environment and natural resources including safety and environmental dimensions by using Sustainability concerns. IRPC was selected by the Industrial Reporting Guidelines of Global Reporting Initiative Environment Institute of the Federation of Thai (GRI G.4) to ensure that information disclosure Industries as a role model for eco-industrial operations. compiled with international standards and to assess The 2017 activities pertinent to the development of the completeness and accordance of contents at core environment, natural resources and society are listed level. IRPC also hired an external agency to cross-check in “Quality Safety Health and Environment” page 205 information for accountability and then submitted it to shareholders together with the Annual Report and 4 Information disclosure and transparency publicized on IRPC’s website. IRPC devises a policy to disclose both financial - IRPC prepared Communication on Progress and non-financial information in a sufficient, accountable (CoP) report and submitted it to UN Global Compact and timely manner via different channels such as 56-1 as one of its members. IRPC has committed to form, annual report, IRPC website (both Thai and operate and report its performance results in English), including the media. IRPC has established compliance with UN Global Compact’s guidelines in investor relations unit to coordinate between IRPC which IRPC has been a member since 2011. In 2017, and shareholders, analysts and other relevant IRPC upgraded its report to become GC Advanced persons. In 2017, IRPC conducted information Level, the highest level of reporting for 4 consecutive disclosure activities as follows: years. An electronic report was sent to the website of • IRPC prepared reports on its information in UN Global Compact (www.unglobalcompact.org) and conformity to SEC and SET; for example, also publicized on IRPC’s website. • Report of directors’ and executives’ vested • IRPC prepared Integrated Report 2016 in interests based on SEC’s criteria. conformity to IR guidelines and also publicized it on • Report of significant information and financial IRPC’s website.

Corporate Governance Report

• IRPC disclosed significant information via electronic mail at www.irpc.co.th to present IRPC’s up-to-date information, both Thai and English such as vision, business characteristics of the company, financial statement, press release, shareholding structure, organization structure, business group structure, information pertinent to the Board and executives, information on investors’ relation, IRPC’s certificate, regulations, memorandum of association, annual report (disclosed within 120 days after the end of an accounting year), integration report, shareholders’ meeting invitation (can be downloaded), documents regarding shareholders’ meeting, financial statement, 56-1 form, meeting related documents, analyst meeting, good corporate governance policy and other business information, accountability of organization, treatment of stakeholders and sustainable business operation. • IRPC communicated via printed media, radio, television, activities with stakeholders and other public relations channels; for example, newsletter in order to report quarterly performance results as well as important activities to shareholders. • IRPC communicated with analysts via line group in case of important events as well as to enhance communication efficiency. • Direct information disclosure with shareholders, investors, stock analysts and media which was performed by the Managing Director and executives during meeting session with each group of stakeholders throughout the year. • Activities for investors and stock analysts are as follows: - Regular meeting with investors, stock analysts, domestic and foreign asset managers to provide insights, directions and business policies of IRPC in which in 2017, IRPC: - Organized quarterly analysts meeting for 4 times in total - Arranged audio conference with domestic analysts to clarify performance results on a quarterly basis for 4 times in total - Organized roadshow and provided domestic and foreign analysts with information for 15 times in total - Organized meeting with IRPC’s executives based on the appointment of investors and analysts (company visit) for 31 times in total

- Organized activity with SET to disseminate IRPC’s information in SET in the City 2017, held annually - “Opportunity Day” activity, held by SET on a quarterly basis - “Analyst Site Visit 2017” by stock analysts who visited UHV project as well as PPE & PPC projects. “IRPC Clean Power” project was also launched with the objective to provide knowledge and understanding of business and progress of IRPC’s major investment projects - Organized “Knowledge Sharing” (KM) seminar to stock analysts and institutional investors to employ information in analyzing operation results of the company as well as to utilize such information as basic factor of IRPC that reflects its shares’ price, for 2 times in total under the topic called “2017 Petrochemical Market Outlook” and “Petrochemical: Moving forward to the Future” • IRPC organized conference calls with stock analysts after the disclosure of financial statements 2016 to SET by providing opportunity to xx analysts to phone in and listen to clarification to help save travel time and could be deemed as “Green Meeting”. The analysts would simultaneously receive complete, accurate and transparent information and in 2017, IRPC successfully arranged the total of xx conference calls. • Refrain from disclosing information regarding IRPC’s business performance to investors and analysts. IRPC will not make any appointments or providing information to analysts for 7 days prior to IRPC’s performance report will be submitted to SET. Nonetheless, investors can find additional IRPC’s information from www.irpc.co.th or from direct inquiry at Investor Relations Department. Tel: 0 2765 7380 E-mail: ir@irpc.co.th Fax: 0 2765 7379

Communication and information disclosure/ clarification of complaints

Among factors regarding good corporate governance, communication of information to

2017 Annual Report IRPC Public Company Limited

stakeholders and the public in a transparent, adequate and correct manner is considered as significant as the Best Practice. IRPC has employed various communication channels and easy-tounderstand language to ensure that the issue to be communicated, whether it will be information required to be disclosed by law or information dissemination of the company in different matters will achieve its ultimate goal; that is, the acknowledgement of various target groups in every sector. Consequently, the Board strongly emphasizes on information disclosure and clarification that can respond to any questions or complaints of the community as well as striving to provide complete and correct information to the public sector or regulatory body such as information relating to the complaint of the community that promotes environmental conservation at Baan Laeng in which Mrs.Payung Meesabai and others had filed a complaint and lawsuit to Rayong Administrative Court with regard to compliance based on Land Code, Section 8 concerning with “Change of land into public path inside the operation facilities and the community’s land outside the operation facilities” which is considered an operation allowed by legal requirements. The land that IRPC bought from the community in exchange will enable the community to benefit the most from such land. Besides, during a major maintenance set by operation plan during the first quarter, IRPC has established measures to cope with potential impact from light, noise, odor and air. To achieve this purpose, IRPC had communicated directly with the public, related public agencies and media while 24-hour complaint reception had also been put in effect in that the officer will inspect the area in question as soon as the complaint arises and

in 2017, IRPC already disclosed such information to the Sustainability Evaluation Committee, SET and Office of the National Anti-Corruption Commission to represent the company’s sincerity in solving the community problems. The communication project were shown in “Cprpolate Social Responsibility page “186-204”

5 Responsibility of the Board of Directors

Annual performance appraisal IRPC conducted a performance appraisal of the Board of directors and the sub-committee. Evaluation results are summarized below: 1. T he Board’s performance appraisal

results as a whole

In 2017 received an average score of 97.04% (compared to 95.32% in 2016) Appraisal topics

Scores

• Board structure and qualifications

97.80 %

• Board’s roles and responsibilities for business strategy specification

97.90 %

• Board’s practices

97.70 %

• Board’s meetings

94.77 %

Additional recommendations from directors are as follows: succession plan of senior executives of every important position must be clearly identified and successfully completed in a timely manner. • Sustainable business operation, policy, responsibility for society and environment as well as treatment of stakeholders must be taken into account the importance of area and community participation.

Corporate Governance Report

2. Individual appraisal outcome

- The average scores of performance self-assessment in 2017 was 97.73% (compared to 97.29% in 2016) - The average scores of other directors (cross-evaluation method) in 2017 was 98.48% (compared to 98.20% in 2016) Appraisal topics

Self-assessment Cross-evaluation score score

• Directors’ qualifications

96.80%

• Responsibility for one’s own decision and action which are explicable

99.11%

98.89%

• Responsibility for duties with sufficient competency and efficiency

97.33%

98.13%

• Fair and equitable treatment of stakeholders which is explicable

96.89%

98.67%

• Transparent and auditable operation with information disclosure

98.67%

99.00%

• Vision of long-term value addition to the business

96.44%

98.00%

• Compliance with ethics and business codes of conduct

98.89%

99.89%

3.2 The Audit Committee’s appraisal outcome as a whole in 2017 earned an average score of 100% (compared to 99.31% in 2016) Appraisal topics

Scores

• Structure and components of the Audit Committee

100%

• Roles and responsibilities

100%

• Relations with internal and external auditors

100%

• Relations with the management

100%

• Reporting

100%

• Quality control

100%

3.3 The Audit Committee’s individual appraisal outcome in 2017 earned an average score of 97.38% (compared to 88.39% in 2016) Appraisal topics • Business knowledge

91.67%

• Proficiency in performance duties

97.22%

• Assigned authority and duties

97.22%

• Independence and fairness

100%

• Understanding of duties and responsibility

100%

• Performance and meetings

3.Performance appraisal of the Audit Committee

3.1 Performance appraisal of the Audit Committee by the Chairman in 2017 earned an average score of 100% (same as 2016) Appraisal topics

Scores

• Independence in performance duties

100%

• Review of financial statements

100%

• Consideration of related transactions

100%

• Review of internal control system

100%

• Review of IRPC’s risk assessment

100%

• Review of compliance with criteria specified By SET and SEC

100%

• Performing other assigned duties

100%

• Reporting IRPC’s operation to the Board on

100%

Scores

98.15%

4. Performance evaluation outcomes of the sub-committee 2017

- The Nomination and Remuneration Committee earned an average score of 98.54% (compared to 95.35% in 2016) - The Corporate Governance Committee earned an average score of 96.44% (compared to 97.30% in 2016) - The Risk Management Committee earned an average score of 99.27% (same as 2016)

2017 Annual Report IRPC Public Company Limited

Appraisal topics

The The The Nomination Corporate Risk and Governance Management Remuneration Committee Committee Committee

• Board structure

100% 96.67%

100%

• Board’s policies

98.33% 95.00%

100%

• Board’s practices

97.50% 97.85%

98.33%

• Preparation of Board meetings

98.33% 96.25%

98.75%

5. Efficiency evaluation outcomes of preparation of Board meeting 2017

(average score of 97.20%) Appraisal topics

Score

• Meeting preparation

96.00%

• Meeting procedures

98.40%

Performance appraisal of the President

The President’s performance appraisal and remuneration are specified under explicit and transparent criteria which fairly and concretely reflect his performance and suit his responsibilities. Details of operation in 2017 will be described in the management structure page 101.

Orientation of newly appointed directors

To ensure that newly appointed directors understand IRPC’s business, including their roles and responsibilities as required by law and international CG standards, in 2016, IRPC held an orientation session for all newly appointed directors before their first attendance of the Board’s meeting. The President shall summarize meeting report by himself and then submit corporate information, regulations and operation manual to the Board prior to the meeting. Newly appointed directors in 2017 are as follows: 1. Mr. Kris Imsaeng 2. Ms. Nantika Thangsupanich Details of orientation session consisted of: 1. The President summarized corporate information consisting of IRPC’s vision, policies, organization structure, business overview, business performance

outcomes as well as other related information to enhance their knowledge and understanding of IRPC’s business. The session should take at least one hour and directors were allowed to ask questions without any time limitations. 2. The Company Secretary prepared director’s handbook and documents for newly appointed directors consisting of director’s handbook (books 1-3), corporate governance handbook, code of conduct, company’s certificate, objectives, company’s regulations, list of directors, duties of the sub-committee, minutes of shareholders’ meetings 2014-2017, minutes of previous Board’s meetings (2014-2017). Disclosure report concerning additional information (form 56-1), annual report 2016, sustainability report 2016, Institute of Directors (IOD) training courses and the schedule of Board meetings for 2017-2018.

Knowledge development

IRPC has encouraged every director and executive to attend the training and seminar beneficial to their performance both in business management/ industry administration, roles, duties and responsibilities of directors. Each director has attended basic training program with IOD (details of directors’ autobiography can be seen in page 22-33). Nonetheless, the Company Secretary has coordinated with the directors to arrange suitable timing for attending new training program of IOD in which in 2017: • Directors attended the seminar under the topic of directors’ and executives’ duties under the new law pertinent to market misconduct, civil penalty and class action, held by IOD’s speakers; namely, Mr.Weerawong Jitrmittraparb from Weerawong Shinawatr and Partners Company Limited. • Three directors (Mr.Anusorn Saengnimnual, Mr.Charnsilp Trinuchakorn and Mr.Chavalit Puntong) attended the seminar “Board role in strategic leadership”,held by Mr.Christopher Hafner (IOD’s speaker). • Mr.Anusorn Saengnimnual, one of IRPC’s directors, attended the training called “Independent Director Forum 2017” on the topic of “Update COSO Enterprise Risk Management: Integrating with Strategy and Performance”.

Corporate Governance Report

• Executives attended seminars/ meetings/ lectures on anti-corruption and corporate governance, hosted by IOD, SET or other academic institutions throughout the year.

Nomination of the President

The Nomination and Remuneration Committee is responsible for nominating an individual with knowledge, expertise and capability appropriate to be assigned as the President of IRPC. Such candidate must possess experience, knowledge and understanding of petroleum and petrochemical business as well as having good image, leadership skills in compliance with CG. The nomination of the President must be approved by the Board.

Succession plan

The Board ensures that IRPC has a proper human resource management plan and recruitment system in place for all those who will become top executives as well as planning on training courses to enhance their skills and knowledge and career path development under HR excellence program. IRPC has established a succession plan for the President, top management and middle management to efficiently nurture successors and to promptly handle all situations whether they will be academic, management or leadership. The executives attended “Leadership Greatness” and 7 habits training courses. The plan also includes job rotation so that they may gain knowledge of business operations as well as on-the-job training.

Corporate governance of IRPC, its subsidiaries and associated companies

• Management structure The Board has approved IRPC’s management structure to ensure efficiency of business management led by the President. In 2017, the Board approved a new, streamlined organization structure with fewer authority levels to avoid redundancy and better suit mandate and business nature of IRPC as shown under organization chart page 34 • Monitoring mechanism Besides the nomination of the President and top management, the Board has set monitoring guidelines for IRPC, its 6 subsidiaries and 5 associated companies. (Details of shareholding structure are explained on page 116) To serve as a director or other positions in IRPC or other organizations, the President must gain approval from the Board. On the other hand, top management of the company must receive approval from the President to serve as a director or other positions in other organizations. IRPCs representatives need an approval of the Board to serve as a director or members of the management team of IRPC’s subsidiaries and associated companies. • Role as shareholders of subsidiaries and associated companies IRPC’s representatives can exercise their voting right at the shareholders’ meeting under rules and regulations specified by subsidiaries and associated companies and within the Board’s approved authority. • Management mechanism of subsidiaries and associated companies

2017 Annual Report IRPC Public Company Limited

Business management must be aligned with IRPC’s main policy and conform to market prices on a fair basis for related transactions. Reporting of any conflicts of interest must be undertaken properly, completely, transparently based on CG. Management of subsidiaries and associated companies will be performed by IRPC’s representatives who are also IRPC’s executives. However, key decision-making must, in any circumstances, gain approval from IRPC’s Board.

Dividend policy

IRPC has a policy for dividend payment of no less than 25 percent of the annual net profit after deduction of taxes and all provisional reserves required by law and IRPC’s regulations. The dividend payment also depends on investment plans, necessity and other factors as seen appropriate by the Board. The 2016 AGM approved the dividend payment of 0.23 baht per share or 48.35% of divident payment ratio for 2016 performance.

Use of inside information

The Board has specified a policy of information disclosure and good practices on maintaining confidentiality of information in its CG manual requiring the directors, executives and employees to take precaution in maintaining inside information as well as disclosing confidential information to outsiders. Therefore, IRPC has established system for maintaining confidential information, specifying levels of confidentiality and restricting right for data access. IRPC’s policy forbids disclosure and use of inside information not yet revealed to the public for the benefit of oneself or others, including the trading of IRPC’s shares.

Major conflicts or disputes with stakeholders

No significant conflicts or disputes with stakeholders were reported this year. Audit fee In 2017, IRPC appointed Deloite Touche Tohmatsu Jaiyos Company Limited to serve as an external auditor. This company has been proved by the Shareholders’ Meeting 2017 as an independent and reliable auditor

and does not have any relations or vested interests or both, with IRPC, its subsidiaries, directors, executives, major shareholders or other related parties.

1. Audit fees paid to auditor or audit company Items

Amount

1. audit fees of IRPC

3,100,000

2. audit fees of subsidiaries

900,000

3. other expenditures such as travel expenses of employees, postage fees, report publication expenditures Total

Not more than 120,000 4,000,000

2. Other expenditures paid to an auditor or audit company Items

Amount

1. hiring fees for financial, tax and legal consultants 2. hiring fees for consultants of CCMS development and installation project

4,000,000

Total

9,008,830

4,800,000

Corporate Citizenship

Apart from good corporate governance, the Board strongly promotes IRPC to act as one of the good corporate citizenship to set a good example while encouraging every relevant stakeholder in its supply chain to adhere and strictly comply to its corporate citizenship policy for the quality of the society. In 2017, IRPC’s operations based on UNGC’s 4 obligations (anti-corruption, labor rights, human rights and environment) can be summarized as follows: Anti-corruption • IRPC was granted a recertification membership of Thailand’s Private Sector Collective Action Coalition Against Corruption or CAC on March 9, 2017. • IRPCT Technology Company Limited and IRPC Polyol Company Limited cooperatively prepared self-evaluation form to request for a membership of CAC project in which CAC granted a certification on March 9, 2017 and on November 10, 2017 respectively. • The establishment of anti-corruption network and support of IRPC’s business partners in joining force with CAC by organizing a lecture on anti-corruption policy and participation with CAC in anti-corruption

Corporate Governance Report

practices, presented to business partners and contractors who performed their duties during project turn around 2017 on June 29, 2017 at IRPC Technology College. IRPC also acted as a medium in coordinating with business partners who presented their intention to become CAC member. • Coordinate with Cubic Academy year5 by Associate Professor Saowanee Thairungroj, Ph.D, President of Thai Commerce University to organize a training program on anti-corruption to staffs, both in Bangkok and Rayong who have never been attended this course on October 12, 2017 at Suan Son Room, 6th floor and at the auditorium of the 10th Year Building, Rayong plant. There are 650 more employees attending the training (363 employees from Bangkok2 287 employees from Rayong) with a total of 4,249 employees from 5,310 employees who already attended the training program. Therefore, only 1,061 employees left who have not participated in such training which will be implemented in 2018. • IRPC had been invited from IOD to join in the discussion regarding the project evaluation of CAC for SME on December 18, 2017 with the purpose to enable small business to participate and become the membership. • An internal audit agency has set up 5-year internal audit plan and an annual plan for completion and efficiency in relevant to the significance and impact of the operation. Besides, IRPC also established Self Audit Project to instill employees’ awareness in complying to specified operation procedures. On this occasion, the Internal Audit Committee arranged the “Diamond Award” 2017 activity which has been held for 7 consecutive years since 2011. The objective of such award is to praise

the regulatory body, the internal audit agency and the cooperation in transparent inspection that promotes efficient internal control and internal audit systems for the organization, deemed one of the most important foundations of good corporate governance. • T h e B o a r d s p e c i f i e d whistleblowing policy by providing channels for whistleblowers to inform the trace and accept complaints from inside and outside organization relating to illegal acts, unethical performance or any fraud actions of every personnel of every level, starting from the President, executives and employees of IRPC, including those of its subsidiaries and other stakeholders related to the company’s business. The Board also defined clear steps of inspection and rectification which must be impartial and transparent while whistleblowers’ protection procedures must be put in place. Channels to inform traces and complaints - Via e-mail: auditor@irpc.co.th - Via letter: The Chairman of Internal Audit Committee IRPC Public Company (Limited) 555/2 Energy Complex, Building B, 6th floor Vibhavadi Rangsit Road, Chatuchak sub-district, Chatuchak district Bangkok 10900 - Via PO.box: PO.box 35 Suntower Building, Bangkok 10900 • Steps of inspecting trace and complaint shall begin with the internal audit department that is responsible for managing and following up results as well as compiling information concerning any wrongdoings or unethical behavior to directly report to the Internal Audit Committee and the Board on a monthly and quarterly basis respectively. In practical, the internal audit department shall consider the accuracy of such complaint and then appoint the directors to further the investigation. If there is an actual wrongdoing or unethical behavior, punishment based on IRPC’s rules and regulations shall be enforced. • In 2017, IRPC received 21 complaints in total, among which 18 cases are not pertinent to corporate governance and business ethics and 3 recommendations. IRPC successfully summarized and ended 17 complaints whereas 4 complaints are being processed.

2017 Annual Report IRPC Public Company Limited

Labor

IRPC has constantly promoted equitability and fairness policy, legal use of labor, whether they will be employees, labor of its business partners, labor of the contractors and customers throughout the supply chain. IRPC also respects individuals’ right and freedom without any indiscrimination due to differences in gender, age, educational background, religion and nationality.

Human rights

• As for networking, IRPC is one of the founders of Global Compact Network Thailand (GCNT) which is the result of the merging of 15 leading organizations in Thailand, certified members of UN Global Compact with the mission to promote business operation with respect to human rights and assist the company to achieve 17 goals of sustainable development. In 2017, GCNT joined force with partnership networks of 7 public and private sectors in total in signing the declaration of national cooperation to move forward the principles regarding business and human rights of UN (UNGPs) in Thailand, hosted by the Office of the National Human Rights Commission of Thailand. General Prayut Chanocha, the Prime Minister also witnessed such event to become one of the driving forces of business operation with respect to human rights policy in Thailand and to encourage the awareness of related agencies regarding this issue while simultaneously extending practical outcome concretely and further it to the regional level. • IRPC cooperated with GCNT in organizing an exhibition displaying “Best Practice” of human rights in private sector, in the preparation before announcing national agenda under the topic of “Human rights join the driving force to move forward to Thailand 4.0 for sustainable development”, chaired by General Prayut Chanocha, the Prime Minister. • IRPC announced its human rights policy as well as comprehensively performing risk evaluation, impact on human rights owing to IRPC’s business operation and employ such information to plan risk management of the organization.

Environment

IRPC has been committed to efficient consumption of natural resources by minimizing wastes that may cause environmental pollution and has strictly conformed to EIA conditions. Furthermore, IRPC ensured that its facilities and other nearby industrial

plants become an ecological industry that can live harmoniously with local community and endeavored to minimize every negative impact on environment to the lowest level possible. In 2017, IRPC, together with shareholders and stakeholders, implemented various social responsibility activities by providing knowledge in terms of plastic use and building a network to instill awareness among students living near IRPC’s facilities with the total of 15 schools from 5 tambons.

Operation plans 2017

IRPC has defined major objectives in developing its corporate governance policies to be comparable to international standard and also endeavors to foster cooperation with every private and public sector, including independent organizations in order to become a driving force that moves the company towards sustainable growth and development. IRPC’s major operation plans include the following: • Improvement of corporate governance handbook as well as providing knowledge in terms of corporate governance to executives and employees to be employed as a guideline of impeccable business operation with ethics and morality. • Use of Technology 4.0 as a tool to improve the efficiency of corporate governance policy. - Knowledge sharing on CG Web Page: Digital 4.0 - Development of CG Self-Assessment (online quiz) • Support and cooperate with other organizations regarding human rights. • Prepare Stakeholders Engagement to ensure that every stakeholder group will receive equal benefits and highest satisfaction. IRPC has planned to develop and implement its corporate governance policy 2018, continued from 2017 and consists of operation plan in compliance with law and strategic plan, including communication and promotion plan, environment governance plan, CSR, community relations plan and stakeholders engagement plan as approved in the Board’s Meeting No.2/2017 on February 13, 2017.

MANAGEMENT STRUCTURE MANAGEMENT STRUCTURE IRPC INFORMATION

2017 Annual Report IRPC Public Company Limited

Management Structure The Board of Directors has envisioned IRPC to become a leading integrated petrochemical complex in Asia by 2020 by formulating short-and long-term strategic plan to assure that the Company growth will be in line with

REPORT

the targeted direction.

SUB-COMMITTEE BOARD OF DIRECTORS

APPOINTMENT

Board of Directors consists of 15 members. The duty is to oversee all corporate operations to ensure the compliance to policies, directions and targets what will return maximum benefit to shareholders, taking into account the interest of all stakeholders with fairness, social responsibility adherence, under the moral and code of conduct to become the good corporate citizen of the world.

SHAREHOLDERS

IRPC conducts business with integrity, taking into account the highest benefit of shareholders, considering sustainable growth and adequate continuous return. In the General Meeting of Shareholders, shareholders will appoint the Board, acknowledge annual operation result of the Company and consider meeting agenda as stipulated by law, including approval of financial state.

AUDIT COMMITTEE is appointed by the Board and the sub-committee shall comprise of at least3 directors, having duty to audit financial statement and to give advice on internal audit procedures. The board shall have at least one member who have adequate knowledge and experience in auditing the accountability of Company's financialstatement.

NOMINATION AND REMUNERATION COMMITTEE is appointed by the Board and the sub-committee shall comprise of at least 3 members, having duty in selection candidates for directorship, sub-committee and President, including to determine fair renumeration.

INDEPENDENT DIRECTORS is independent from major shareholders or group(s) of major shareholders. and the Company executives, The directorâ&#x20AC;&#x2122;s duties is to express their opinions freely under the assigned tasks as to protect benefit of all shareholders and stakeholders equally. As of end of 2017, the Independent Directors consists of 7 members. In the event where the chairman is not an independent director, the independent director may be elected to perform duty in the meeting in some occasions.

PRESIDENT CHAIRMAN The Board of Directors elects one member as a chairman, to support and promote the performance of the Board at highest extend of the responsibility assigned, to oversee and monitor management result of the Board and sub-committees to ensure the effectiveness as specified in corporate objectives.

is appointed by Board of Directors

MANAGEMENT

The duty is to manage work under responsibility, policy and target assigned by the President.

MANAGEMENT COMMITTEE

CORPORATE GOVERNANCE COMMITTEE

RISK MANAGEMENT COMMITTEE

is appointed by the Board and the sub-committee shall comprise of at least 3 members, having duty to propose practice guidelines, give advice on good corporate governance to the Board, to oversee the good corporate governance operation of the Company to ensure the efficiency.

is appointed by the Board and the sub-committee shall comprise of at least 3 members, having duty to formulate risk management policy, risk management plan and risk management procedures to cover the entire organization.

The duty is to manage and ensure parallel direction of the whole operations, to consider important matters on business operation and to screen the agenda as to propose to the Board for approval. - President - Senior Executive Vice President - Executive Vice President

PRESIDENT is appointed and supervised by the Board of Directors, having duty to manage Company's operation to ensure its compliance with objectives, policies and strategies set forth by the Board as well as report the Companyâ&#x20AC;&#x2122;s performance result to the Board in a correct and transparent manner.

COMPANY SECRETARY

is appointed by Board of Directors The duty is to perform secretarial tasks pursuant to the Securities and Stock Exchange Act B.E. 2535 and as stipulated by the Capital Market Supervisory Board as well as performing duties assigned by the Board.

2017 Annual Report IRPC Public Company Limited

8 Management Structure

The management Structure or Organization Structure of IRPC comprises of the shareholders, the Board of Directors and the management, with the President serving as the chief executive officer. The Board is accountable to the shareholders and the management to the Board of Directors. Efficient management and corporate governance are evident in the management structure, and relationship among the shareholders, the Board and the management is taken into consideration to ensure competitiveness, sustainable growth, and value addition for the shareholders in the long run as well as all stakeholders on an equitable basis. In monitoring the business, the shareholders elect the Board of Directors to manage the operations for them. The Board defines vision, business directions, policies, and strategic plans and assign the management to implement them in an efficient manner to achieve the goals, and follow up on the progress to ensure efficiency of operations to the utmost benefits and appropriate returns to shareholders’ investment.

8.1 Board of Directors

As of December 31, 2017, the Board consisted of 15 members, which suit the sizes, types and complexity of its businesses as follows: • 14 non-management directors (93.34% of the entire Board)

• One management director (President) Seven members of the Board are independent directors (46.67% of the entire Board, two of whom are female).

SHAREHOLDERS

BOARD OF DIRECTORS

PRESIDENT

Management Structure

Details of the Board of Directors as of December 31, 2017 are as follows: No. 1. 2.

Name Mr. Tevin Vongvanich Mr. Woothisarn Tanchai

Mr. Nuttachat Charuchinda

Mr. Chansin Treenuchagron

Mr. Chavalit Punthong

Mr. Somnuk Bomrungsalee

Mr. Anusorn Sangnimnuan

Gen. Sasin Thongpakdeeŕ¸ľ

Gen. Theppong Tippayachan

10.

Mr. Ekniti Nitithanprapas

11.

Mr. Jessada Promjart

12.

Ms. Ruenvadee Suwanmongkol

13.

Ms. Nantika Thangsuphanich

14.

Mr. Kris Imsang

15.

Mr. Sukrit Surabotsopon

Position

Appointed Date

Director

Chairman

October 20, 2015

1st term

Independent Director Director Director Director Independent Director Independent Independent Director Independent Director Director Independent Director Independent Director Director Director Director (Management Director)

Chairman of the Nomination and Remuneration Committee Chairman of the Risk Management Committee Member of the Risk Management Committee Member of the Nomination and Remuneration Committee Chairman of the Audit Committee Chairman of the Corporate Director Governance Committee Member of the Corporate Governance Committee Member of the Corporate Governance Committee Member of the Risk Management Committee Member of the Audit Committee Member of the Audit Committee Member of the Nomination and Remuneration Committee Member of the Corporate Governance Committee Member of the Risk Management Committee/ President/ Secretary to the Board of Directors

June 19, 2015 April 4, 2017 April 29, 2016

1st term 2nd term 1st term

October 20, 2015

1st term

November 17, 2015 1st term April 9, 2014 April 4, 2017 August 27, 2016 April 4, 2017 September 1, 2014 April 3, 2015 September 1, 2016

1st term 2nd term 1st term 2nd term 1st term 2nd term 1st term

November 17, 2015 April 4, 2017 March 16, 2016 April 4, 2017 April 1, 2016

1st term 2nd term 1st term 2nd term 1st term

December 2, 2017

1st term

December 2, 2017

1st term

October 1, 2013 April 3, 2015

1st term 2nd term

Note: 1. Mr. Songpope Polachan, Independent Director and Chairman of the Audit Committee resigned on December 1, 2017. The Board appointed Ms. Nantika Thangsuphanich as a director to fill the vacant position. 2. Mr. Pramual Chanpong, Independent Director and Member of the Corporate Governance Committee resigned on December 1, 2017. The Board appointed Mr. Kris Imsang as a director to fill the vacant position.

Directors authorized to sign for IRPC The directors authorized to sign for IRPC as of December 31, 2017, comprise (1) Mr. Tevin Vongvanich, (2) Mr. Chansin Treenuchagron, (3) Mr. Sukrit Surabotsopon, (4) Mr. Nuttachat Charuchinda, and (5) Mr. Chavalit Punthong. The signatures of two of these five are required together with IRPCâ&#x20AC;&#x2122;s Seal affixed.

Composition and Qualifications of the Board

1. The Board of Directors consists of 5-15 directors. 2. Independent directors must account for at least one third of the Board and there must be at least three of them on the Board. 3. Directors must not be older than 70 years old. 4. Each term of office for directors and independent directors is three years. Directors and independent

2017 Annual Report IRPC Public Company Limited

directors can serve up to three consecutive terms (nine years). 5. Directorship in listed companies on the Stock Exchange of Thailand (SET) must not exceed five companies in total (including IRPC). 6. Directors must be qualified persons with knowledge, skills, capacity, and experience in necessary fields. As a minimum, there must be three petroleum or petrochemical experts, one legal expert, and one accounting and finance expert, in compliance with IRPC’s policy, and nomination and appointment criteria, based on education, management experience in relevant fields, as well as success recognized by business with the equivalent size of IRPC. 7. Directors must be duly qualified and be without the prohibitions stated in the Public Limited Company Act, the Securities and Exchange Act, the Capital Market Advisory Board’s notifications, SEC’s and SET’s rules and regulations, IRPC’s Articles of Association and Corporate Governance principles, and other related laws and regulations. Also, they must be free from any questionable traits for running IRPC’s businesses. 8. Directors must be duly qualified and be without the prohibitions according to the Cabinet resolution on January 24, 2011, on the appointment of high-ranking government officers and that of directors in state enterprises and/or juristic persons whose shares are held by state enterprises. 9. Directors must command characteristics and personal images complementary and supportive of their work in corporate governance to add value to IRPC, including ethics, integrity, independence, assertiveness, creativity, capability to perform the duty of care and duty of loyalty with dedication, and are socially acceptable. 10. For former directors, their past performance, dedication, as well as useful opinions/ recommendations made will be also considered.

Independent Directors

Independent directors mean directors who are independent from the major or group of major shareholders and the Company’s management. In performing their duties, independent directors are free to provide opinions to protect the interests of all shareholders and stakeholders on an equitable basis.

Qualifications stipulated by IRPC for independent directors are more stringent than those of SEC and SET: 1. Holding no more than 0.5% of the voting shares in IRPC, parent companies, subsidiary companies, associated companies, major shareholders, or any persons with controlling power over IRPC. Shares held by parties related to independent directors must also be included (not exceeding 1% under the requirements). 2. Not being current or past directors participating in the management of IRPC, employees, staff members, or advisers with regular salaries from IRPC, or any persons with controlling power over IRPC, parent companies, subsidiary companies, associated or equivalent companies, major shareholders, or persons with controlling power over IRPC, except such qualifications have ended for at least two years. However, such restrictions do not apply to independent directors who have been government officers or advisers of government agencies which are IRPC’s major shareholders, or of persons with controlling power over IRPC. 3. Not being related by blood or by legal registration as parents, spouses, siblings, or children, spouses of the children of any directors, management members, major shareholders, persons with controlling power, or persons about to be nominated as directors, management members or persons with controlling power over IRPC or its subsidiaries. 4. No past or present business relationship with IRPC, parent companies, subsidiary companies, associated companies, major shareholders, or persons with controlling power over IRPC to an extent that such independent directors’ discretion may be compromised, and not current or past substantial shareholders or persons with controlling power over the person having business relation with IRPC, parent companies, subsidiary companies, associated companies, major shareholders, or persons with controlling power over IRPC, except when such qualifications have ended for at least two years. Business relations referred to in the first paragraph shall include any ordinary course of business transactions, any lease of properties, transactions relating to assets or services, or any financial support or acceptance of financial support by way of either lending, borrowing,

Management Structure

guaranteeing, collateral providing, or any other manners similar to it that could result in an obligation required to be performed by the applicant or the party to it for three percent or more of the net tangible asset value of Baht 20 million or more, whichever is lesser. The method for calculating the value of connected transactions under the Capital Market Supervisory Boardâ&#x20AC;&#x2122;s notification on Rules of Entering into Connected Transactions must be applied mutatis mutandis in the calculation of the amount of debt. In calculating such debt, the debt incurred during the past year leading to the date on which such business relation with such person exists must also be included. 5. Not being current or past auditors of IRPC, parent companies, subsidiary companies, associated companies, major shareholders, or of persons with controlling power over IRPC, and not substantial shareholders, persons with controlling power, or partners of any audit firms or offices which employ the auditors of IRPC, parent companies, subsidiary companies, associated companies, major shareholders, or persons with controlling power over IRPC, except when such qualifications have ended for at least two years. 6. Not being past or current professional advisers, including legal or financial advisers receiving the service fee of over Baht 2 million per year from IRPC, parent companies, subsidiary companies, associated companies, major shareholders, or persons with controlling power over IRPC, and not substantial shareholders, persons with controlling power, or partners of such professional service providers,

except when such qualifications have ended for at least two years. 7. Not being directors appointed as a representative of a director of IRPC, of a major shareholder of IRPC, or of a shareholder who is related to the major shareholder of IRPC. 8. Not engaged in any similar business in competition with IRPC or its subsidiaries, and not being substantial partners in a partnership, executive directors, employees, staff members, or advisers who receive salaries or hold more than one percent of the voting shares in another company engaging in a similar business and in competition with IRPC or its subsidiaries. 9. Not having any characteristics which may compromise the ability to provide independent comments on the operation of IRPC. If there is dismissal or retirement of independent directors, IRPC must locate a qualified person as a replacement while maintaining the total number of independent directors under the regulations of the Capital Market Supervisory Board and corporate governance principles. However, if another director commands the required qualifications for independent directors, he or she will automatically become an independent director of IRPC.

Appointment and Dismissal

IRPCâ&#x20AC;&#x2122;s procedures for appointment and dismissal of directors are summarized as follows:

2017 Annual Report IRPC Public Company Limited

Appointment

1. Shareholders appoint directors. The Nomination and Remuneration Committee screens appropriate candidates and tables a list to the Board before submission to the shareholders’ meeting for consideration and approval under the following criteria: (1) One shareholder carries one vote per share. (2) To elect directors, votes can be cast for individual candidates or a collective vote can be cast for the entire number of directors to be elected, as seen appropriate by the shareholders’ meeting. Each candidate, by individual or collective voting, is allowed to receive the number of votes in accordance with the total number of shares held by each shareholder under (1). Shareholders cannot split their votes in favor of other candidates. (3) Successful candidates are ranked by the number of votes received, the number of whom matches the number of directors to be elected. If candidates get equal votes, which makes the number of successful candidates exceed that of directors to be elected, the Chair of that meeting will cast a decisive vote. 2. The Board selects one member as the Chair and can also select one or more members to be his/ her Vice Chair to perform duty as stipulated in IRPC’s Articles of Association and as assigned by the Chair (no Vice Chair was appointed currently). 3. The Board selects one member as the President and as the Secretary to the Board. 4. If any vacancies on the Board exist for any reasons other than term expiry, the Board must select a qualified person without prohibited qualifications in their following meeting. If the remaining term is less than two months, the newly elected director will stay in office for the remaining term of the former. The resolution of the Board on this matter must consist of no less than three-quarters of the votes of the remaining directors. 5. If the number of vacancies on the Board reduces its composition to less than the Board’s quorum, the existing directors are allowed only to call, on behalf of the Board, a shareholders’ meeting to elect the replacements for all vacancies. The

shareholders’ meeting must be held within one month from the date of such vacancy. The newly elected director will stay in office only for the remaining term of the former. 6. The newly elected directors should be briefed on the information that is useful and essential to their work within three months from the date of their appointment.

Dismissal

1. As a rule, directors complete their three-year terms. (However, dismissed ones may be re-elected). 2. In addition to term expiry, directorship ends by death, resignation, lack of qualifications, or being found with prohibitions by law, the resolution of the shareholders’ meeting, or court verdict. 3. Directors wishing to leave the post must tender their resignations to IRPC. Such resignation will take effect from the date the resignation reaches IRPC.

Duties and Responsibilities

The Board supervises IRPC’s operations with duty of care and duty of loyalty. It is responsible for its shareholders on IRPC’s business operations, ensure that management is in compliance with policies, guidelines, and targets for the highest benefit of shareholders based on ethics and benefits of all stakeholders as follows: 1. Define IRPC’s vision, direction, and strategies that support sustainable growth under economic, social, and environmental aspects, by expressing full views, valuing importance on information search beneficial to the direction, as well as consider potential risks to provide confidence that the management can efficiently implement the defined vision, direction, and strategies. 2. Review and approve IRPC’s major policies, strategies, objectives, financial targets and action plans at least once a year, as well as regular follow-up on the implementation of the defined action plans in compliance with IRPC’s direction and strategies. 3. Ensure a reliable accounting system, financial reporting and auditing, as well as supervise the suitable assessment procedure to ensure efficient and effective internal control and internal audit.

Management Structure

4. Consider potential major risk factors and determine the overall guidelines of risk management, ensure that an efficient risk management system or procedure is in place, as well as seek business opportunities that may arise from the risks. 5. Monitor and solve problems of conflicts of interest that may arise, as well as connected transactions, consider important main business transactions, focusing on maximum benefit to shareholders and all stakeholders. 6. Arrange for an appropriate compensation system or mechanism for IRPC’s top management, taking into account IRPC’s performance, to foster short-term and long-term motivation 7. Stipulate that the President’s directorship in other companies must be approved by the Board and the top management’s directorship in other companies must be approved by the President, excluding the appointment of directors in IRPC’s subsidiaries or joint-venture companies proportional to its shareholding or to shareholders’ agreements, as determined to be the Board’s authority. 8. Ensure regular assessment of the President’s performance and determine the President’s compensation in accordance with his performance to foster shortterm and long-term motivation. 9. Provide suitable communication channels with each group of shareholders and assess the information disclosure to ensure its accuracy, clarity, transparency, reliability, and high standards. 10. Assume leadership and act as a role model in conducting business in compliance with IRPC’s corporate governance and CSR guidelines. 11. Encourage IRPC to undertake anti-fraud and anti-corruption activities in every form and promote IRPC’s good governance. 12. Appoint a qualified Company Secretary as stipulated by law to perform and assume responsibilities in compliance with the Securities and Exchange Act.

Approval Authority

1. Vision, strategies, short-term and long-term corporate plans, and major policies such as the corporate governance policy, risk management policy, anti-corruption policy and information disclosure policy.

2. IRPC’s financial criteria, investment, and investment direction, as well as financial targets, action plans, and annual budget. 3. Procurement that exceeds the President’s approval as authorized for each item. 4. IRPC’s major operations under its objectives, articles of association, resolutions of the shareholders’ meeting and relevant laws, as well as supervise the management to implement policies and plans as defined with efficiency and effectiveness. 5. Transactions under the Securities and Exchange Act, such as connected transactions, property acquisition and disposal. 6. Payment of interim dividends to shareholders and staff’s annual compensation. 7. Performance targets/ goals and results, and determination of President’s compensation. 8. President’s position in other organizations. 9. List of management to hold directorship in IRPC’s subsidiaries or joint-venture companies proportional to its shareholding.

Approval Authority of the Shareholders

Moreover, in performing their responsibilities on the following essential matters, the Board must receive approval from the shareholders by votes of no less than three-quarters of the total number of eligible votes cast by eligible shareholders present. 1. Sale or transfer of the entire or essential parts of IRPC’s businesses to other parties. 2. Purchase or acquisition of businesses of other companies or private companies. 3. Making, amending, or terminating the entire or essential parts of agreements on the lease of IRPC’s businesses. 4. Assigning other parties to manage IRPC’s business. 5. Merger of IRPC’s business with other parties for profit/ loss sharing. 6. Making amendments to IRPC’s Memoranda of Association or Articles of Association. 7. Increase or decrease of IRPC’s registered capital or issuance of debentures. 8. Merger or dissolution of IRPC.

2017 Annual Report IRPC Public Company Limited

Duties and Responsibilities of the Chairman

To ensure the clear division of duties of IRPC’s policy formulation and IRPC’s operation, and the role of Board to lead and monitor the management’s performance, the Company stipulates that the Chairman and the President must not be the same person. The Chairman’s duties and responsibilities include the following: 1. Call Board meetings, chair Board meetings and shareholders’ meeting, as well as set meeting agenda in collaboration with the President. 2. Approve matters for Board meetings (in collaboration with the President). 3. Attend Board meetings and shareholders’ meetings, ensure efficient meetings in compliance with IRPC’s Articles of Association, while encouraging directors to express their independent views with adequate information provided. 4. Encourage the Board to work to their utmost ability, based on their duties and responsibilities, under corporate governance, and support the work of the President. 5. Supervise and follow up the work of the Board and the committees to ensure that IRPC’s objectives are reached. 6. Cast a decisive vote in Board meetings in case of equal votes of both sides. Sub-Committees In compliance with corporate governance, the Board has appointed four standing sub-committees, each of which is assigned to consider and oversee specific critical matters in their respective areas. Each committee is structured as detailed below:

1. Audit Committee The Audit Committee appoints at least three independent directors. The Audit Committee must be

duly qualified under the notifications of SET and the Capital Market Supervisory Board and IRPC’s CG Handbook. The Audit Committee must have at least one director who possesses sufficient knowledge and experience to review the reliability of the budget: (1) Mr. Somnuk Bomrungsalee (Independent Director) Chairman (2) Ms. Ruenvadee Suwanmongkol (Independent Director) Member (3) Mr. Jessada Promjart (Independent Director) Member Office of Corporate Internal Audit and Secretary to the Audit Committee

The Audit Committee assigns the Office of Corporate Internal Audit to ensure that IRPC’s operations are executed in compliance with the laws, related rules and regulations and the set internal control system, and to handle both internal and external complaints. The Vice President, Office of Corporate Internal Audit, commands independence and reports directly to the Audit Committee. The Audit Committee appoints the Vice President, Office of Corporate Internal Audit, Secretary to facilitate its work on meeting appointments, preparation of meeting agenda, dispatch of accompanying documents, and minutes of meetings. The secretary must possess knowledge, ability, and experience to assist the Audit Committee. Mr. Thammasak Panyowatkool Was appointed : Vice President, Office of Corporate Internal Audit, and Secretary of the Audit Committee Effective Date: January 1, 2016-to present (Mr. Thammasak Panyowatkool’s profile is shown under “Management Team” in page 44)

Term of Office 1. Members have the same terms of office as their directorship. 2. Members who complete their terms of office may be re-appointed, as seen appropriate by the Board. 3. In case of dismissal, the reason must be given to SET.

Management Structure

4. In case of vacancies in the Audit Committee other than term expiry, the Board must appoint other qualified directors as new members within three months after the date of which the number of the Audit Committee members is not filled.

Duties and Responsibilities

1. Review IRPC’s financial reports to meet accounting standards with correctness and sufficiency, as stipulated by law. 2. Review IRPC’s internal control and internal audit systems to ensure their suitability and effectiveness, and review effectiveness and sufficiency of the risk management process. 3. Review IRPC’s operations to ensure compliance with the Securities and Exchange laws, and other laws relating to IRPC’s business. 4. Review IRPC’s connected transactions or any other transaction with possible conflicts of interest to ensure compliance with legislation and SET’s regulations, and ensure justification of such transactions and the highest benefit for IRPC. 5. Select and nominate independent persons as external auditors and make recommendations on their dismissal, fees, and hold a meeting with them in the absence of the management at least once a year. 6. Consider the scope of auditing and auditing plans of the external auditors and the Office of Corporate Internal Audit for complementarity and reduced redundancy on the matter of financial auditing. 7. Approve the auditing plans, as well as provide views on budget and manpower of the Office of Corporate Internal Audit. 8. Consider, appoint, transfer, or dismiss the Executive Vice President, Office of Corporate Internal Audit, as well as consider the independence of the office. 9. Review the efficiency and effectiveness of information technology systems relevant to internal control and risk management. 10. Arrange for an internal audit report to be included in IRPC’s annual report. 11. Possess the authority to have access to the information of the review and investigation of relevant persons under the duties and responsibilities of the Audit Committee as stipulated by IRPC’s regulations.

12. In performing its task, the Audit Committee must report to the Board for timely improvement and rectification if it comes across or doubts list or action that may have significant impact on IRPC’s financial status and work performance, namely: 1) List of conflicts of interest 2) Fraud or abnormality or major faults in the internal control system 3) Violation of securities and exchange laws, SET’s regulations, or laws relevant to IRPC’s business, If the Board or the management fails to undertake improvement or rectification within a suitable period of time and without valid reason, the Audit Committee must report the list or the action of such violation to SEC or SET on receiving the information without delay. 13. Perform other tasks as assigned by the Board.

2. Nomination and Remuneration Committee

The Nomination and Remuneration Committee appoints at least three directors, at least one of whom must be an independent director. (1) Mr. Woothisarn Tanchai (Independent Director) Chairman (2) Mr. Chavalit Punthong (Director) Member (3) Ms. Nantika Thangsuphanich (Director) Member Ms. Monwipa Choopiban, Executive Vice President, Office of Corporate Affairs and Company Secretary, serves as Secretary.

Term of Office

1. Members have the same terms of office as their directorship. 2. Members who complete their terms of office may be re-appointed, as deemed appropriate by the Board.

2017 Annual Report IRPC Public Company Limited

Duties and Responsibilities

Duties and responsibilities of the Nomination and Remuneration Committee can be divided into two parts: Part 1: Nomination 1. Consider and propose the structure, size and component of the Board and the sub-committees that suit the size, type and complexity of the business in a transparent manner, without influence from any shareholder with controlling power, and submit for the approval of the Board or the Shareholders’ meeting, or both. 2. Consider the qualifications of the candidates for directorship based on: 1) The Board consists of directors with skills, knowledge, capacity and required qualifications, without prohibitions stipulated in the laws and related regulations, IRPC’s CG Handbook or Articles of Association. 2) General characteristics, such as ethics and responsibility, decision-making based on facts and reason, maturity, not being afraid to freely express different and independent point of views, adherence to principles and standards as a professional, and diversity in knowledge, work experience, age and gender. 3) Skilled characteristics which suit IRPC’s business, needs and required conditions. It will be also of IRPC’s benefit if the candidate is on the list guaranteed by a government agency. 4) Consider directors’ dedication, that is, the number of listed companies where each director holds tenure of up to five listed companies for each director and three listed companies for each management director. 3. Consider the qualifications of the candidates for independent directors in compliance with IRPC’s corporate governance principles, the criteria of SET and SEC, and without prohibitions stipulated by law and related regulations. 4. Propose criteria and a process for nominating qualified candidates for incoming directors and submit them to the Board for approval.

5. Screen appropriate candidates for consideration of directorship, in the cases of vacancies and completion of terms, and table the list to the Board or the shareholders’ meeting for approval, or both. 6. Consider the list of directors for membership of the Sub-committees and table it to the Board for approval. 7. Screen appropriate candidates for the position of the President with attention and suitability for IRPC’s maximum benefit and submit the list to the Board for approval. 8. Define performance components and targets of the President including leadership, implementation under the strategies, financial performance, relation between the Board and the management, and the succession plan, to be used as criteria in the President’s performance assessment and annual compensation adjustment, and submit to the Board for approval. 9. Assess the yearly performance and the compensation of the President such as salary, pension, bonus, welfare and other monetary and non-monetary benefits based on the set criteria, and submit to the Board for approval. 10. Consider succession plans for the position of the President and executives to ensure uninterrupted operations and the availability of successors on retirement or inability to perform of the President or management.

Part 2: Compensation

11. Consider and propose the structure, criteria and forms of compensation for the Board and the sub-committees, such as retainer fees, bonuses, meeting allowance and compensation in the forms of either monetary or non-monetary, which correspond with the size of business, adequate and fair, to foster motivation of qualified directors, and correspond with shareholders’ interest. Directors and sub-committees’ compensation must have the approval of the shareholders’ meeting. 12. Define criteria and forms of compensation which are appropriate, adequate and fair for the President to foster motivation for sustainable value addition to IRPC and to keep capable executives with the Company. The President’s compensation is approved by the Board.

Management Structure

13. If needed, IRPC can engage at its own expenses external consultants to advise it on the determination of appropriate compensation for the directors and the President. 14. Perform other duties as assigned by the Board.

Procedures for Nomination of Directors

The Nomination and Remuneration Committee screens appropriate candidates for the Board or the sub-committees based on the candidates’ qualifications as determined by the Board under the following criteria: 1. Consider the suitability of specific knowledge, experience, and ability that will be of use to IRPC, with experience in the same fields of business or industry as IRPC’s to supplement the required Board component, and set it in Board Skills Matrix, so that the nomination is in line with IRPC’s business direction. 2. Consider the diversification of gender, age, expertise, skill, and experience (Board Skill Matrix/ Board Diversity), knowledge and ability in both Hard Skills and Soft Skills and sustainability supporting factor to ensure that the directors can perform their work efficiently and complement the Board as a whole with their different knowledge and experience to the maximum benefit of IRPC. The information of directors in the Directors’ Pool will be also taken into consideration. 3. Review qualifications of nominated candidates for compliance with the laws, regulations of the regulators, such as the Public Limited Company Act and the Securities and Exchange Act B.E. 2535 (1992). 4. Consider directors’ dedication, in case of returning directors, past performance, number of listed companies that each director holds tenure in of not exceeding five listed companies, to suit IRPC’s nature of business and in compliance with the Cabinet resolution on January 24, 2011, on the appointment of high-ranking government officers and the appointment of directors in state enterprises. 5. In case of nominating independent directors, consider their independence in compliance with the criteria of SEC, IRPC’s criteria, as well as the necessity to nominate additional independent directors in the case of disqualification of any director, to maintain the structure of the Board as defined in its policy.

6. Determine the terms of office of independent directors at three years. Directors/ independent directors can serve up to three consecutive terms (nine years). 7. Approach the persons whose qualities agree with the criteria to ensure their willingness to take up IRPC’s directorship if appointed. 8. Submit the screened candidates with accompanying qualifications and reasons of nomination to the Board for consideration before submitting the list to the shareholders’ meeting for approval. The Board, however, appoint directors to fill vacancies or resigned posts during the year as stated in IRPC’s Articles of Association and Public Limited Company Act. 9. For sub-committees, the Nomination and Remuneration Committee will consider appropriate knowledge and ability, the composition of the entire committees, and criteria of directorship such as the Board Skill Matrix/ Board diversity, and directors’ independence and submit to the Board for approval.

3. Corporate Governance Committee

The Corporate Governance Committee consists of at least three directors, at least one of whom must be an independent director, with the duties of recommending implementation guidelines and advice on corporate governance to the Board, as well as monitoring IRPC’s operation: (1) Mr. Anusorn Sangnimnuan (Independent Director) Chairman (2) Lt. Gen. Sasin Thongpakdee (Independent Director) Member (3) Gen. Theppong Tippayachan (Independent Director) Member (4) Mr. Kris Imsang (Director) Member Ms. Monwipa Choopiban, Executive Vice President, Office of Corporate Affairs, and Company Secretary, serves as Secretary.

2017 Annual Report IRPC Public Company Limited

Term of Office

1. Members have the same terms of office as their directorship. 2. Members who complete their terms of office may be re-appointed, as deemed appropriate by the Board.

Duties and Responsibilities

1) Define a corporate governance policy as well as major and related implementation such as an anti-corruption policy, sustainability management, environmental governance, and social responsibility as well as ethics and code of business conduct requirements in line with the principles, standards and requirements of listed-company regulators, such as SET and SEC, and other national and international recognized organizations, and review and improve the policy and CG Handbook at least once a year. 2) Define guidelines and measures, monitor and follow up to ensure that IRPC’s operations comply with policies and guidelines, and that corporate governance is being continually developed and elevated. 3) Consider and endorse the method to be used in the assessment of the Board and the sub-committees’ performance and report the assessment results to the shareholders’ meeting annually. 4) Monitor the work of the management to ensure compliance with corporate governance. 5) Monitor the work under the corporate governance policy and annual corporate governance work plan as approved by the Board. 6) Monitor implementation under the anti-corruption policy, sustainability management, social, communities and environment responsibility, and other GRC (good governance, risk management and compliance management) related policies to ensure efficiency and suitability with IRPC’s business. 7) Perform other tasks as assigned by the Board. 4. Risk Management Committee The Risk Management Committee consists of at least three directors who are experts in the petroleum or the petrochemical business with the duties and responsibilities of defining the risk management policy, risk management plan, and risk management

procedure for the entire company, in compliance with IRPC’s corporate and strategic plans: (1) Mr. Nuttachat Charuchinda (Director) Chairman (2) Mr. Chansin Treenuchagron (Director) Member (3) Mr. Ekniti Nitithanprapas (Director) Member (4) Mr. Sukrit Surabotsopon (Director) Member Member Ms. W anida Utaisomnapa, Executive Vice President, Corporate Business Planning, serves as Secretary.

Term of Office

1. Members have the same terms of office as their directorship. 2. Members who complete their terms of office may be re-appointed, as seen appropriate by the Board.

Duties and Responsibilities

1) Formulate suitable, efficient policies and recommendations on risk management involving IRPC’s business operations. 2) Define risk management plans and enterprise risk management processes. 3) Consider financial instruments and derivatives contracts, such as futures contracts and hedging. 4) Develop an enterprise risk management system to ensure efficiency. 5) Monitor and assess performance of enterprise risk management implementation. 6) Submit regular reports on risk management monitoring and risk mitigation to the Board for acknowledgment. Critical matters having significant impacts on IRPC must be reported to the Board without delay.

Management Structure

7) Support the Risk Manager’s operation and continuously assess the major factors of risk management in compliance with corporate plans and on a par with other leading companies. 8) Screen and provide advice on risk management for investment projects with high technical complication, long-term obligations and significant risks. 9) Perform other tasks as assigned by the Board.

Risk Management Committee at Management level

Apart from a Risk Management Committee at the Board level, IRPC has set up a Risk Management Steering Committee at the management level and working groups to monitor its overall risk management and internal control system as follows: 1. Risk Management Steering Committee (RMSC) 2. Financial and Supply Chain Risk Management Committee (Hedging Committee) 3. The Risk Manager is responsible for the overall risk management. 4. The Risk Owner defines risk management plans and is responsible for risk management. 5. The Risk Agent coordinates with everyone in the unit or in projects for risk management planning, report on follow-up and on risk management performance to manager or project director to ensure appropriate, sufficient risk management that responds to risks at the unit level. 6. License and Compliance Working Team manages compliance of risk management and report the results of the performance to the Risk Management Committee for acknowledgement, provide advice on legal compliance, and compiles all regulations relevant to IRPC’s operations, set up an alarm system and an operation support system to maximize operational efficiency.

Meetings of the Board and the Sub-Committees

IRPC schedules Board meetings in advance throughout the year. In 2017 the Board held meetings once a month on every Tuesday of the third week of the month. Extraordinary meetings might be called as seen fit. The Chair and the President will jointly set the meeting agenda and matters, as well as

encouraging directors to propose the matters for the Board meeting. The Company Secretary arranges the meeting and ensures that the meeting proceeds smoothly and facilitates the work of the directors, such as providing advice and recommendation on laws, regulations, and IRPC’s Articles of Association. In 2017 IRPC set up Board Portal via the internet from the computer, smartphone and tablet. This use of electronic system helps the Board work with more flexibility and efficiency, such as filing and retrieving of IRPC’s critical document, supplementary documents for the Board and sub-committees meeting, development and learning plans, and important information for the Board, both old and new, sends meeting notices and agenda in compliance with IRPC’s Articles of Association with sufficient details seven days ahead of each meeting to allow directors enough time to prepare themselves. At every meeting, in compliance with the corporate governance policy, directors with vested interests or conflicts of interest on each agenda must excuse themselves or abstain from voting on each connected agenda. At every meeting, the Chair gave opportunities for directors to express their opinions freely, and all enquiries will be clarified before voting decided by majority votes or special resolution (as defined in IRPC’s Articles of Association), cast by at least twothirds of the directors. The minutes of the meeting on this matter must be clearly recorded, as well as recommendations and observations of the directors, to be adopted at the next Board meeting. The adopted minutes together with supporting documents will be systematically filed for easy reference in the electronic format as confidential document. In 2017 the Board held 12 meetings, the independent directors held two meetings, and one meeting without the management. One special meeting to define and review IRPC’s vision, direction, strategies and business plans (BOD-STS). The resolutions from the independent directors’ meetings and the meeting without the management were so diverse and useful that the Board assigned the management for implementation based on the resolutions and report the results to the Board. The meeting attendance of the entire Board in 2017 was higher than 80% (96%) and the individual attendance of each director was higher than 75% (75-100%) as summarized below.

2017 Annual Report IRPC Public Company Limited

Meeting Attendance of the Board and Sub-committees in 2017 Board

Name

(15 members) Number of meetings this year: 12

(Unit: Meetings)

Audit Risk Corporate Nomination Independent Board Management Committee Governance and Remu- Directors without Committee Committee neration Management Committee (4 members) (3 members) (3 members) (3 members) Number of Number of Number of Number of meetings meetings meetings meetings Number of Number of this year: 5 this year: 11 this year: 7 this year: 12 meetings: 2 meetings: 1

1. Mr. Tevin Vongvanich

12/12

1/1

2. Mr. Woothisarn Tanchai

12/12

6/6

2/2

1/1

3. Mr. Nuttachat Charuchinda

12/12

4/4

1/1

4. Mr. Chansin Treenuchagron

12/12

4/4

1/1

5. Mr. Chavalit Punthong

12/12

6/6

1/1

6. Mr. Somnuk Bomrungsalee(1)

12/12

5/5

1/1

7. Mr. Anusorn Sangnimnuan

12/12

1/1

7/7

2/2

1/1

8. Lt. Gen. Sasin Thongpakdee

12/12

7/7

2/2

1/1

9. Gen. Theppong Tippayachan

9/12

4/5

1/2

1/1

10. Mr. Ekniti Nitithanprapas

11/12

4/4

11/11

1/1

11. Mr. Jessada Promjart

12/12

2/2

1/1

12. Ms. Ruenvadee Suwanmongkol

10/12

7/11

1/2

1/1

13. Ms. Nantika Thangsuphanich(2)

1/1

14. Mr. Kris Imsang (3)

1/1

15. Mr. Sukrit Surabotsopon

12/12

4/4

16. Mr. Songpope Polachan4)

11/11

10/10

2/2

1/1

17. Mr. Pramual Chanpong(5)

11/11

6/6

2/2

1/1

Note: 1. Mr. Somnuk Bomrungsalee was appointed Chairman, Audit Committee, following the resolution of Board Meeting No. 11/60 on November 21, 2017, with effect from December 2, 2017. 2. Ms. Nantika Thangsuphanich was appointed director following the resolution of Board Meeting No. 11/60 on November 21, 2017, with effect from December 2, 2017. 3. Mr. Kris Imsang was appointed director following the resolution of Board Meeting No. 11/60 on November 21, 2017, with effect from December 2, 2017. 4. Mr. Songpope Polachan tendered his resignation with effect from December 1, 2017. 5. Mr. Pramual Chanpong tendered his resignation with effect from December 1, 2017.

Management Structure

The Management

IRPC’s management structure has the President as the chief executive officer responsible for the management of operations assigned by the Board for the best interests of the company under appropriate situations. The President reports any significant change to the management structure to the Board for approval. There was, however, no significant change in 2017.

The President

The Board assigns the President as the chief executive officer of the management team to manage IRPC’s business under IRPC’s objectives and articles of association, and the Board-defined policy. His authority is clearly defined in writing. Regulations on IRPC’s business operations are issued for all employees to acknowledge and adhere to. Mr. Sukrit Surabotsopon was appointed President with effect from October 1, 2013-present.

Duties and Responsibilities

1) Manage IRPC’s business under the laws, IRPC’s objectives and articles of association, the Board’s policy and the resolutions of shareholders’ meeting. 2) Manage all IRPC’s executives and employees, draw up regulations and terms of works, appoint, establish salary, wage, welfare, transfer, dismiss, promote executives and employees either to a higher position or salary, and execute disciplinary punishment under the Board’s policy. 3) Perform in compliance with the Company’s policy, strategic and business plans, vision and

mission as approved by the Board, with efficiency and for the best interests of IRPC. 4) Approve a budget for the investment and procurement, and operating expenses under IRPC’s plans and annual budget approved by the Board. 5) Manage cash flow, investment, budget, plans and risk management process with efficiency under the authority assigned by the Board. 6) Consider IRPC’s performance and submit the proposed interim and annual dividend payment to the Board’s or shareholders’ meeting (as the case may be) for approval. 7) Evaluate IRPC’s performance and submit a progress report to the Board every quarter. 8) Act as a leader and role model in conducting business with adherence to business ethics and code of business conduct. 9) Act as a leader and good example to support and motivate other employees in complying with the corporate cu lture, making decisions in the appropriate direction, communicating positively to gain confidence and make good image of the organization, and adhere to good environmental governance with social and community responsibility with an emphasis on safety and occupational health. 10) Ensure that the operations align with anticorruption and anti-bribery guidelines. 11) Ensure implementation in complying with the Sustainable Development Goals (SDGs) in pursuit of a Good Corporate Citizenship. 12) Perform other acts to support IRPC’s operation under the responsibilities delegated by the Board.

2017 Annual Report IRPC Public Company Limited

The management

As of December 31, 2017, IRPC Management consists of 16 members as follows:

No.

Name

Position

Mr. Sukrit Surabotsopon

President

Mr. Pongpraphan Titathavewatana

Senior Executive Vice President, Petrochemical & Refinery Business Unit

Mr. Somkiat Lertritpuwadol

Senior Executive Vice President, Corporate Commercial and Marketing

Ms. Rachadaporn Rajchataewindra

Senior Executive Vice President, Corporate Accounting & Finance

Mr. Thammasak Panyowatkool

Executive Vice President, Officiate as Office of Internal Audit Manager

Mr. Pravet Assavadakorn

Executive Vice President, Innovative Product Center

Ms. Monwipa Choopiban

Executive Vice President, Office of Corporate Affairs/ Company Secretary

Ms. Awrapin Ketratanakul

Executive Vice President, Office of Sustainability Management

Mr. Sirimet Leepagorn

Executive Vice President, Office of Strategic Transformation and Result Delivery

10.

Mr. Kraisit Anukoolutaiwong

Executive Vice President, Corporate Human Resources

11.

Ms. Wanida Utaisomnapa

Executive Vice President, Corporate Business Planning

12.

Mr. Chalor Panutrakul

Executive Vice President, Corporate Business Development

13.

Mr. Veerawat Srinoradithlert

Executive Vice President, Engineering and Maintenance

14.

Mr. Woravuth Sivapetranart

Executive Vice President, Refinery and Petrochemical Operation

15.

Mr. Vichit Nittayanonte

Executive Vice President, Operation Support

16.

Mr. Phothiwat Paopongchuang

Executive Vice President, President Office

Duties and Responsibilities 1. Ensure that the policies and goals defined by the Board are put into practice. 2. Define strategic plans, objectives and major goals of business functions in line with IRPC’s vision and mission, for implementation and use as working guidelines for subordinates. 3. Be responsible for the management of the operations to achieve the goals, objectives and shortterm and long-term strategic plans within the management framework under the organization structure as assigned. 4. Advise, support, assist and solve problems for the team, induce motivation and create a good work environment to ensure efficient and effective performance of the subordinates.

5. Promote the development of subordinates and apply their potential to the maximum benefit for themselves and the corporation. 6. Support sustainable corporate growth under corporate governance, good governance and a socially and environmentally responsible organization.

Management Committee

To ensure the flow, efficiency, connection support and good business cooperation of IRPC’s, its joint ventures’ and affiliates’ operations, the President appointed a Management Committee, consisting of the President, Senior Executive Vice President and Executive Vice President in every business unit with the Executive Vice President, Office of Corporate Affairs serving as Secretary to the management Committee.

Management Structure

The management Committee schedules a meeting in advance once a week on Monday. In 2017, the management Committee held 45 meetings.

Duties and Responsibilities

The Management Committee provides consultation and recommendations to the President for his decision-making on matters significant to IRPC’s strategies, business operation direction, operation plans, corporate performance, investment plans and budgets, resource management and allocation to IRPC and its affiliates, as well as manage all business operations under the same direction. The Management Committee provides information for the President for his decision-making or for submission to the Board for consideration for matters beyond his authority as follows: • Consider and screen the investment management, budget allocation for investment, and support the operation of IRPC and its affiliates. • Consider and screen essential business matters to be submitted for the Board’s approval. • Consider important operation directions, based on accurate and complete information • Acknowledge reports on IRPC’s, national and global situations which impact IRPC’s business. • Consider and acknowledge progress of the operation under IRPC’s major strategies. • Approve important investment budgets within the authority given by the President. • Set human resource (HR) management policy and mechanisms for HR system management. • Consider and review risk management in business operations. • Consider implementation related to safety, health and the environment and propose recommendations for problem-solving to forge common awareness and joint improvement, such as complaints or incidents. • Follow up on the results of internal audit and guidelines for problem-solving as advised by the Audit Committee for overall development. • Follow up on progress and operational results of IRPC and its affiliates, and provide useful recommendations. • Propose other information of the business

function or related information, or both, to ensure sufficient information for efficient decision-making by the President and the management. Moreover, the President appoints sub-committees and other working groups as seen fit and in line with IRPC’s strategic plans and situations, to manage, perform, or screen the operation under the tasks assigned, for example, Rayong Management Committee (RMM) to manage the operations and integration of the entire group of Rayong plants under the corporate vision and mission to achieve goals. In 2017, The Committees were appointed to manage the license issues based on clause 9 for public use to handle complaints from communities with transparency and to the utmost benefit of the communities and corporate business operation. The Quality, Security, Safety, Occupational Health, Environment Committee (QSSHE) was appointed to manage IRPC and its affiliates’ quality management and social responsibility in compliance with IRPC Quality, Security, Safety, Occupational Health, Environment and Energy Policy. The VP meeting was scheduled in advance once a month on every last Friday to report the VP on operational results in all aspects, and consider other business and employee issues and other matters. For matters of significance, they are to be considered by the MC Meeting.

Company Secretary

In conformity with the Securities and Exchange Act, B.E. 2535 (1992) as amended in B.E. 2551 (2008), and the corporate governance principles of listed companies, the Board appointed Ms. Monwipa Choopiban, Executive Vice President, Office of Corporate Affairs, as Company Secretary, with effect from January 24, 2012, to perform duties under the above-mentioned act and the announcements of the Capital Market Supervisory Board. The main duties and responsibilities of the Company Secretary are summarized as follows: • Perform the duties with accountability, care, and integrity • Provide to directors advices and recommendations on the laws and IRPC’s Articles of Association

2017 Annual Report IRPC Public Company Limited

and rules and regulations, and ensure that IRPC’s businesses comply with the laws and relevant regulations, and report to the Board of any significant changes. • Arrange Board’s Meetings and Shareholders’ Meetings in compliance with the laws, IRPC’s articles of associations and regulations, as well as general practices. • Prepare the minutes of the Board’s Meetings and Shareholders’ Meetings and ensure that their resolutions are complied with and carried out. • Ensure that the information and data under his/ her responsibilities are disclosed to regulators and governing units as required. • Prepare and file important documents, director registration, Board meeting notices, minutes of the meeting of the Board, IRPC’s annual report, invitation to shareholders’ meetings, minutes of AGMs, reports on conflicts of interest reported by directors and the management, and other duties as defined by the Capital Market Supervisory Board and related laws. • Prepare information and reports relating to the Board and IRPC’s corporate governance in applying for membership or good corporate citizenship, and standardization, at both national and international levels. • Take responsibility in anti-corruption activities under the policy and measures defined by the Board. • Acquire information, knowledge and good practices relating to the Company Secretary’s responsibilities and corporate governance, at national and international levels, to be applied to IRPC as appropriate. Develop knowledge and understanding and attend training and seminars to keep up with ever-stricter regulations and management directions. • Provide both one-way and two-way communication channels on good governance for IRPC’s stakeholders, that is, investors, shareholders, the media and the public. Ms. Monwipa Choopiban Position : Company Secretary Effective Date : January 24, 2012 - present. (Ms. Monwipa Choopiban’s profile is shown under “Management Term” in page 46 attachment )

Compensation

Board of Directors

The Board has appointed the Nomination and Remuneration Committee to consider the guidelines for the compensation of IRPC’s Board of Directors and members of the committees to propose to the Board. The compensation criteria are: 1. The compensation is divided into two portions, monthly pay and meeting allowance (no other compensation or benefits in other forms, either monetary or non-monetary, are to be paid to the directors). 2. The compensation is based on the responsibilities and performance of the directors and IRPC’s performance, and it should be comparable to peer companies with a comparable size and business risks to attract directors whose qualifications suit IRPC’s businesses to be its director. The compensation criteria surveyed by Thai Institute of Directors (IOD) and SET are also used in the consideration. The compensation proposed for 2017 was comparable to the median of peer companies of the resources group (energy and infrastructure) according to the report on directors’ compensation 2016, prepared by IOD in November 2016. 3. The scopes of work and assigned responsibilities of the directors and sub-committee members are also considered. 4. The Chair of the Board and the Chairmen of the committees are entitled to an additional 30% compensation of the other directors. 5. Members of the Audit Committee, Nomination and Remuneration Committee, Risk Management Committee and Corporate Governance Committee are entitled to only the meeting allowances for the meetings attended. 6. The compensation of the Board and subcommittee members must be approved by the shareholders’ meeting. The 2017 Annual General Meeting held on April 4, 2017, approved the compensation of the Board and committees at the same rate of those of 2016 as detailed below:

Management Structure

6.1. Board and sub-committees’ compensation in 2017 (The compensation rate has been used since 2006). Directors

Monthly compensation/ person (Baht) Meeting allowance/ person (Baht)

1. Board

Chair

60,000

Director

45,000

2. Audit Committee, Nomination and Remuneration Committee, Corporate Governance Committee, Risk Management Committee and other committees to be established

Chair

60,000

Director

45,000

6.2 Bonuses for Directors: Bonuses for directors correspond with IRPC’s performance. The 2017 AGM of April 4, 2017, approved directors’ bonuses totaling Baht 29 million or 0.30% of IRPC’s net profit as proposed by the

Nomination and Remuneration Committee. The amount will be allocated to each director by their meeting attendance. In addition, the Board Chair will be paid 30 percent higher than other directors. Details are as summarized below.

The Compensation received by each Director in 2017 is summarized below: Monthly compensation

Name

(Unit : Baht)

Meeting Meeting Bonus allowance allowance for (2016 for Board Subperformance) committees

Total

1. Mr. Tevin Vongvanich(1)

720,000

2,605,991

4,045,991

2. Mr. Woothisarn Tanchai

540,000

360,000

2,004,608

3,444,608

3. Mr. Nuttachat Charuchinda

540,000

240,000

1,336,406

2,656,406

4. Mr. Chansin Treenuchagron

540,000

495,000

180,000

2,004,608

3,219,608

5. Mr. Chavalit Punthong

540,000

270,000

2,004,608

3,354,608

6. Mr. Somnuk Bomrungsalee(2)

540,000

285,000

2,004,608

3,369,608

7. Mr. Anusorn Sangnimnuan

540,000

420,000

668,203

2,168,203

8. Lt. Gen. Sasin Thongpakdee

540,000

315,000

1,503,456

2,898,456

9. Gen. Theppong Tippayachan

540,000

405,000

180,000

501,152

1,626,152

10. Mr. Ekniti Nitithanprapas

540,000

495,000

180,000

2,004,608

3,219,608

11. Mr. Jessada Promjart

540,000

495,000

1,503,456

3,078,456

12. Ms. Ruenvadee Suwanmongkol

540,000

450,000

315,000

1,336,406

2,641,406

13. Ms. Nantika Thangsuphanich

43,548

45,000

133,548

(3)

100

2017 Annual Report IRPC Public Company Limited

Name

Monthly compensation

Meeting Meeting Bonus allowance allowance for (2016 for Board Subperformance) committees

Total

14. Mr. Kris Imsang(4)

43,548

45,000

133,548

15. Mr. Sukrit Surabotsopon

540,000

180,000

2,004,608

3,264,608

16. Mr. Songpope Polachan(5)

495,000

600,000

2,004,608

3,594,608

17. Mr. Pramual Chanpong(6)

495,000

270,000

2,004,608

3,264,608

18. Mr. Cherdpong Siriwit(7)

1,336,406

19. Mr. Watcharakiti Watcharothai(8)

1,169,355

20. Mr. Sarun Rungkasiri(9)

501,152

21. Mr. Trumph Jalichandra(10)

501,152

8,277,096

7,965,000

4,380,000

29,000,000

49,622,096

TOTAL

Note: (Apart from the above, IRPC does not pay any compensation or benefits in any other form to the directors). 1. Mr. Tevin Vongvanich had reimbursed PTT Plc his director’s compensation in compliance with the conditions stipulated in PTT’s President Employment Agreement. 2. Mr. Somnuk Bomrungsalee was appointed Chair of the Audit Committee following the resolution of the Board at Meeting No. 11/60, on November 21, 2017, with effect from December 2, 2017. 3. Ms. Nantika Thangsuphanich was appointed director following the resolution of the Board at Meeting No. 11/60 with effect from December 2, 2017. 4. Mr. Kris Imsang was appointed director following the resolution of the Board at Meeting No. 11/60 with effect from December 2, 2017. 5. Mr. Songpope Polachan tendered his resignation with effect on December 1, 2017. 6. Mr. Pramual Chanpong tendered his resignation with effect on December 1, 2017. 7. Mr. Cherdpong Siriwit reached 70 years of age (IRPC’s good governance stipulates the age of directors of up to 70), with effect from September 1, 2016. 8. Mr. Watcharakiti Watcharothai tendered his resignation with effect from July 25, 2016 9. Mr. Sarun Rungkasiri tendered his resignation with effect from April 4, 2016 10. Mr. Trumph Jalichandra completed his term at the 2016 AGM on April 1, 2016

Top Management Compensation

The President’s compensation is designed under clear, transparent, fair and reasonable principles, taking into consideration duties and responsibilities and IRPC’s performance outcomes. The Nomination and Remuneration Committee considers the compensation and proposes it to the Board for approval.

The process is as follows: 1. The Nomination and Remuneration Committee proposes the compensation component and criteria to the Board for consideration in January or February. 2. After the approval of the Board, the President is informed and acknowledges them. 3. The Nomination and Remuneration Committee assesses the results of his performance based on the

101

Management Structure

Management Compensation

criteria approved by the Board, and assesses his performance by taking into account overall components, such as corporate business situations, challenging targets, problem-handling, communication skills in emergency situations, social and environmental governance, handling of risky situations concerning good governance, and promotion of good corporate image. 4. In December, the Nomination and Remuneration Committee presents to the Board for approval the President’s evaluated performance during the year and proposes his annual compensation adjustment. In 2017 the Board, at the meeting No. 2/2560 on February 14, 2017, approved the performance assessment criteria for the President. The criteria were defined to cover challenging targets and both monetary and non-monetary performances, and social, community and environmental responsibility. The President accepted and employed his utmost potential in managing the business and leading the organization toward its goals according to the assessment components of Corporate KPIs and factors supporting IRPC’s transparent and sustainable growth such as leadership and the prompt handling of problems which impact IRPC and the stakeholders in the right direction and with great success and good corporate governance. In 2017, the President could successfully perform his duty in an excellent level for these two factors In which the compensation rate was comparable to other organizations in the same industry or similar industry. Compensation

IRPC annually measures management performance at every level, under the Performance Management System (PMS) which consists of: 1) Key Performance Indicators (KPIs), key missions cascaded down from the corporate level each year, in line with corporate goals, performance, and financial performance in alignment with the duties and responsibility of the management, and 2) Job competencies, a behavioral assessment tool for the management and employees’ competency while performing their works, to ensure that IRPC achieve its goals with quality and sustainability In 2017, compensation for 16 management members under SET’s definition including the President in the forms of salary, bonuses, and contribution to provident fund totaled Baht 116.25 million.

2016 (17 persons)

2017 (16 persons)

Salary

76.57

77.30

Bonus

28.87

32.08

6.95

6.87

112.39

116.25

Compensation

Other compensation

Provident Fund

Total

102

2017 Annual Report IRPC Public Company Limited

Director of Subsidiaries (as of 31 December 2017) 4. IRPC A&L Co., Ltd.

1. IRPC Oil Co., Ltd. Name

Position

Name

Position

1. Mr. Sukrit Surabotsopon

Chairman

1. Mr. Sukrit Surabotsopon

Chairman

2. Ms. Rachadaporn Rajchataewindra

Member

2. Ms. Rachadaporn Rajchataewindra

Member

3. Mr. Vichit Nittayanonte

Member

3. Mr. Pongpraphan Titathavewatana

Member

4. Mr. Sirimet Leepagorn

Member

4. Mr. Toshiro Kojima

Member

5. Mr. Chalermchai Somboonpakorn

Member

5. Mr. Hideyuki Tokimasa

Member

6. Mr. Takayuki Mano

Member

7. Mr. Hiroshi Osubo

Member

8. Mr. Worawuth Sivapetranart

Member

9. Mr. Vichit Nittayanonte

Member

6. Mr. Somkiat Lertritpuwadol

Acting

Managing Director

2. IRPC Polyol Co., Ltd. Name

Position

1. Mr. Sukrit Surabotsopon

Chairman

2. Ms. Rachadaporn Rajchataewindra

Member

3. Mr. Woravuth Sivapetranart

Member

4. Mr. Pravet Assavadakorn

Member

5. Mr. Vichit Nittayanonte

Member

6. Mr. Rafal Zdon

Member

7. Mr. Sergiusz Stefanowski

Member

8. Mr. Chalermchai Somboonpakorn

Managing Director

3. IRPC Technology Co., Ltd. Name

Position

1. Mr. Sukrit Surabotsopon

Chairman

2. Mr. Surachai Torapicharttrakool

Member

3. Ms. Monwipa Choopiban

Member

4. Mr. Kraisit Anukoolutaiwong

Member

5. Mr. Preecha Pokawat

Member

6. Mr. Phothiwat Paopongchuang

Managing Director

10. Mr. Somkiat Lertritpuwadol

Acting

Managing Director

5. Rakpasak Co., Ltd. Name

Position

1. Mr. Veerachai Ariyapornpiroon

Member

2. Mr. Surachai Torapicharttrakool

Member

3. Mr. Vichit Nittayanonte

Member

4. Mr. Somboon Sadsin

Managing Director

103

Position Table of Directors and Executives (as of 31 December 2017)

Note: X = Chairman / = Director // = Management Team

// //

/ /

X / / /

// /

/ /

/ / /

/ /

PTT Digital Solution Co., Ltd.

/,//

Sport Services Alliances Co., Ltd.

PTT Global Chemical Plc.

IRPC Clean Power Co., Ltd.

PTT Energy Solutions Co., Ltd.

Rakpasak Co., Ltd.

IRPC A&L Co., Ltd.

Related Companies

PTT Plc.

X / / / / / / / / / / / / / /, // // // // // // // // // // // // // // // //

IRPC Polyol Co., Ltd.

Mr. Tevin Vongvanich Mr. Woothisarn Tanchai Mr. Nuttachat Charuchinda Mr. Chansin Treenuchagron Mr. Chavalit Punthong Mr. Songpope Polachan Mr. Pramual Chanpong Mr. Somnuk Bomrungsalee Mr. Anusorn Sangnimnuan Gen. Sasin Thongpakdee Gen. Theppong Tippayachan Mr. Ekniti Nitithanprapas Mr. Jessada Promjart Ms. Ruenvadee Suwanmongkol Mr. Sukrit Surabotsopon Mr. Pongpraphan Titathavewatana Mr. Somkiat Lertritpuwadol Ms. Rachadaporn Rajchataewindra Mr. Thammasak Panyowatkool Ms. Monwipa Choopiban Mr. Pravet Assavadakorn Mr. Phothiwat Paopongchuang Ms. Awrapin Ketratanakul Ms. Wanida Utaisomnapa Mr. Vichit Nittayanonte Mr. Veerawat Srinoradithlert Mr. Woravuth Sivapetranart Mr. Kraisit Anukoolutaiwong Mr. Sirimet Leepagorn Mr. Chalor Panutrakul

IRPC Technology Co., Ltd.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30.

IRPC Oil Co., Ltd.

Name IRPC Plc.

No.

UBE Chemical (Asia) Plc.

Associated Companies

Subsidiaries

104

2017 Annual Report IRPC Public Company Limited

Report on IRPC Shares held by the Directors and Management Number of shares held by the directors as of December 31, 2017

No.

Name

Mr. Tevin Vongvanich 1.

10.

(As of (As of December December Share Increase 31, 2016) 31, 2017) (decrease) Shareholding/ Shareholding/ Number of Number of during the year shares shares

Spouse Children under legal age

0.00000% 900 none none

not change not change not change

Mr. Woothisarn Tanchai

none

not change

Spouse Children under legal age

none none

not change not change

Mr. Nuttachat Charuchinda

none

not change

Spouse Children under legal age

none none

not change not change

Mr. Charnsin Treenuchagron

none

not change

Spouse Children under legal age

none none

not change not change

Mr. Chavalit Punthong

none

not change

Spouse Children under legal age

none none

not change not change

Mr. Somnuk Bomrungsalee

none

not change

Spouse Children under legal age

none none

not change not change

Mr. Anusorn Sangnimnuan

none

not change

Spouse Children under legal age

none none

not change not change

Lt. Gen. Sasin Thongpakdee

none

not change

Spouse Children under legal age

none none

not change not change

Gen. Theppong Tippayachan

none

not change

Spouse Children under legal age

none none

not change not change

Mr. Ekniti Nitithanprapas

none

not change

Spouse Children under legal age

none none

not change not change

Remark

105

Management Structure

No.

Name

Mr. Jessada Promjart 11.

12.

13.

14.

15 16.

17.

Spouse Children under legal age Ms. Ruenvadee Suwanmongkol Spouse Children under legal age Ms. Nantika Thangsuphanich Spouse Children under legal age Mr. Kris Imsang Spouse Children under legal age Mr. Sukrit Surabotsopon Spouse Children under legal age

(As of (As of December December Share Increase 31, 2016) 31, 2017) (decrease) Shareholding/ Shareholding/ Number of Number of during the year shares shares 0.00002% 5,000 0.00010% 20,000 none none none N/A N/A N/A N/A N/A N/A

0.00002% 5,000 0.00010% 20,000 none none none none none none none none none

not change not change not change not change not change not change not change not change not change not change not change

0.03915% 8,000,000 none none

0.04160% 8,500,000 none none

0.00245% 500,000 not change not change

Directors who completed the terms/ resigned/ retired during the year Mr. Songpope Polachan none none Spouse none none Children under legal age none none Mr. Pramual Chanpong none none Spouse none none none none Children under legal age

Remark

not change

not change not change not change not change not change not change

New director appointed with effect on December 2, 2017 New director appointed with effect on December 2, 2017

Director resigned with effect on December 1, 2017 Director resigned with effect on December 1, 2017

Note: N/A - information not available since directorsâ&#x20AC;&#x2122; appointment was made after the mentioned period, or the directors resigned or completed the term during the period

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2017 Annual Report IRPC Public Company Limited

Number of shares held by the management as of December 31, 2017 No.

Name Mr. Sukrit Surabotsopon

0.03915% 8,000,000 none none

0.04160% 8,500,000 none none

0.00245% 500,000 not change not change

0.00178% 364,478 none none

0.00203% 414,478 none none

0.00024% 50,000 not change not change

0.00145% 295,580 0.00008% 15,900 none

not change not change not change

0.00011% 22,000 0.00029% 60,000 none

not change not change

Mr. Thammasak Panyowatkool

none

not change

Spouse Children under legal age

none none

not change not change

Mr. Pravet Assavadakorn

0.00124% 253,600 0.00012% 25,000 none

not change not change

Children under legal age

0.00124% 253,600 0.00012% 25,000 none

Ms. Monwipa Choopiban

none

not change

Spouse Children under legal age

none none

not change not change

Ms. Awrapin Ketratanakul

0.00045% 92,721 none none

not change

0.00055% 113,292 0.00015% 29,862 none

not change

Spouse Children under legal age Mr. Pongpraphan Titathavewatana

Spouse Children under legal age Mr. Somkiat Lertritpuwadol

Spouse Children under legal age Ms. Rachadaporn Rajchataewindra

Spouse Children under legal age

Spouse

Spouse Children under legal age Mr. Sirimet Leepagorn

(As of (As of Share Increase December 31, 2016) December 31, 2017) (decrease) during Shareholding/ Shareholding/ the year Number of shares Number of shares

Spouse Children under legal age

not change

not change not change

107

Management Structure

No.

Name

(As of (As of Share Increase December 31, 2016) December 31, 2017) (decrease) during Shareholding/ Shareholding/ the year Number of shares Number of shares

Mr. Kraisit Anukoolutaiwong 10.

0.00000% 1 none none

none none

0.00103% 210,440 none none

not change not change

Mr. Chalor Panutrakul

none

not change

Spouse Children under legal age

none none

not change not change

0.00005% 10,579 none none

not change

0.00088% 179,351 none none

not change

0.00163% 333,394 none none

not change

0.00031% 64,320 none none

not change

Spouse Children under legal age Ms. Wanida Utaisomnapa

11.

12.

Spouse Children under legal age

Mr. Veerawat Srinoradithlert 13.

14.

15.

16.

Spouse Children under legal age Mr. Woravuth Sivapetranart Spouse Children under legal age Mr. Vichit Nittayanonte Spouse Children under legal age Mr. Phothiwat Paopongchuang Spouse Children under legal age

In 2017 and the past five years, no directors and management team members have records of wrongful acts under the Securities and Exchange Act B.E. 2535 (1992) or Derivatives Act B.E. 2546 (2003) or any acts regarding: (1) Dishonesty or serious negligence (2) Disclosure or dissemination of false information or messages potentially causing misunderstanding, or hold up essential facts that should be disclosed, both of which might have affected the decisions of the shareholders, investors, or concerned parties

none

donate to Saijai Thai Foundation not change not change not change

not change not change

(3) Unfair acts or taking advantage of investors in the sale and purchase of shares or futures, or being or playing a part in supporting such acts.

Compliance

Besides corporate governance and risk management, systematically implemented since 2003, the Board highly values business in compliance with applicable laws and IRPCâ&#x20AC;&#x2122;s regulations in pursuing its goals with great success and earning the shareholders and stakeholdersâ&#x20AC;&#x2122; trust. It defines a corporate compliance

108

2017 Annual Report IRPC Public Company Limited

policy of IRPC and Group and sets up a new unit (the Corporate Compliance and Secretary Division), responsible for corporate compliance and corporate secretariat work, while setting up a compliance system and driving a compliance policy to concrete implementation to ensure that IRPC’s operations comply with the laws and good governance. The unit reports the results to the Board for acknowledgement. To ensure efficient compliance implementation, “The Corporate Compliance Policy of IRPC and Group Companies” was announced on November 17, 2016, for the management and employees to comply with relevant laws and regulations as follows: 1. Compliance with relevant laws and regulations The directors, executives, and employees of the IRPC Group companies are to strictly uphold laws and regulations related to business operation to ensure smooth operation in compliance with relevant laws and regulations, while maintaining social, community and environment responsibility, and health of stakeholders-the foundation of sustainable development.

2. Fair competition and anti-trade monopoly

The directors, executives, and employees of the IRPC Group companies are to comply with laws on anti-trade monopoly or trade competition, while supporting free and fair commercial competition void of discrimination and unfair practices

3. Anti-corruption and anti-bribery The directors, executives, and employees of the IRPC Group companies are to comply with laws on the prevention and suppression of corruption and bribery involving state officers, foreign-state officers, or private-company officers.

4. Upholding of human rights principles

The directors, executives, and employees of the IRPC Group companies are to uphold laws on labor and human rights, while respecting labor rights, women’s rights, children’s rights, and human dignity as well as the liberty and equality of those certified by or protected under Thai and international laws.

5. Safeguarding of intellectual property rights

The directors, executives, and employees of the IRPC Group companies are to protect intellectual properties of IRPC or IRPC Group of Companies, or both, from being infringed without permission. They are to uphold others’ intellectual property rights, while promoting their executives’ and employees’ creativity resulting in intellectual properties in the interests of the company and Thailand’s economy at large.

6. Prevention and suppression of money laundering and non-sponsorship of terrorism causes The directors, executives, and employees of the IRPC Group companies are to avoid becoming part

109

Management Structure

of money laundering networks or sponsoring terrorism causes. To this end, it values oversight and provision of clues to officers in case of illegal deeds, while ensuring proper recording of accounting entries, and financial or property facts in line with Thai and international laws.

7. Proper management, storage, and application of company data

The directors, executives, and employees of the IRPC Group companies are to exercise good stewardship of data and properties under proper management standards under the law to ensure that they are optimally applied; that harm and abuse are averted for the benefits of oneself or others; and that data confidentiality principles are upheld by adhering to the rules of law and business ethics of maintaining data of the Company, its customers, business partners, or others’ private data and not leveraging them for purposes beyond permission or beyond mutual, lawful relations under Thai and international laws. 8. Responsibility for the environment, health,

and safety

The directors, executives, and employees of the IRPC Group companies are to conduct business with responsibility for communities, society, and the environment with due regard for the health and safety of employees and stakeholders. They are also

to regularly put in place projects designed to cultivate such awareness among employees, executives, and related parties.

Compliance mission:

Compliance implementation in 2017 was highly evident. IRPC in collaboration with leading consultant PricewaterhouseCoopers ABAS Ltd (PwC) set a direction for its compliance framework to suit its organization structure and nature of business on a par with international best practices and international standard. The framework was completed in late 2017, and a Pilot Group was appointed to carry out a test for concrete implementation. In addition, to ensure implementation alignment with IRPC’s vision and strategic plans, a five-year compliance roadmap was defined. The Board meeting to consider corporate strategic plans (2018 BOD-STS) approved the roadmap and the implementation under the roadmap, which targeted “zero non-compliance” in pursuing Compliance DNA.

110

2017 Annual Report IRPC Public Company Limited

IRPC INFORMATION Company Name IRPC Public Company Limited Symbol/ Ticker IRPC Company Registration 0107537002567 Type of Business Petroleum and Petrochemical Industry Resources Sector Energy & Utilities Registered Capital Baht 20,475,000,000,

consisting of 20,475,000,000 common shares at Baht 1 per share Paid-up Capital Baht 20,434,419,246, consisting of 20,434,419,246 common shares at Baht 1 per share Location Headquarters and Plant: 299 Moo 5, Sukhumvit Road, Choen Noen, Rayong, Thailand Tel. + 66 (0) 3861-1333 Fax. + 66 (0) 3861-2813 Bangkok Office: 555/2, Energy Complex, Building B, 6th Floor, Vibhavadi Rangsit Road, Chatuchak, Bangkok 10900 Tel. + 66 (0) 2765-7000 Fax. + 66 (0) 2765-7001 Website www.irpc.co.th

References Share Registrar

Auditor

Baht Bond Registrar

Thailand Securities Depository Company Limited 93 Ratchadaphisek Road, Din Daeng, Bangkok 10400 Tel. + 66 (0) 2009-9000 Fax. + 66 (0) 2009-9991 Mr. Permsak Wongpatcharapakorn CPA No. 3427, Deloitte Touche Tohmatsu Jaiyos Advisory Co., Ltd. 11/1 AIA Sathorn Tower, 23rd-27th Floor, South Sathorn Road, Yanawa, Sathorn, Bangkok 10120, Thailand Tel. + 66 (0) 2034-0000 Fax + 66 (0) 2034-0100 TMB Bank Public Company Limited 3000 Phaholyothin Road, Chompon, Chatuchak, Bangkok 10900, Thailand Tel. +66 (0) 2299-1111

111

IRPC Information

Juristic Persons whose 10% Shares or more are Held by the IRPC No.

Company

% of shares holding

Paid- up Capital (Million Baht)

IRPC Oil Co., Ltd. Address: 555/2 Energy Complex, Building B, 7th Floor, Vibhavadi Rangsit Road, Chatuchak, Bangkok 10900 Tel. +66 (0) 2646-6666 Fax. +66 (0) 2646-6677/ 6688 Type of Business: Sale of refined products

99.99%

2,000

Rakpasak Co., Ltd. Address: 555/2 Energy Complex, Building B, 7th Floor, Vibhavadi Rangsit Road, Chatuchak, Bangkok 10900 Tel. +66 (0) 2646-6666 Fax. +66 (0) 2646-6677/ 6688 Type of Business: Marine logistics Remarks: Subsidiary of IRPC Oil Co., Ltd.

99.99%

IRPC Technology Co., Ltd. Address: 309 Moo 5, Sukhumvit Road, Choeng Noen, Rayong Tel. +66 (0) 3889-9130-2 Fax. +66 (0) 3889-9130-2 ext. 301 Type of Business: Vocational School

99.99%

750

IRPC Polyol Co., Ltd. Address: 555/2 Energy Complex, Building B, 7th Floor, Vibhavadi Rangsit Road, Chatuchak, Bangkok 10900 Tel. +66 (0) 2646-6700 Fax. +66 (0) 2646-6702 Type of Business: Production and sale of polyol

74.99%*

300

IRPC A&L Co., Ltd. Address: 555/2 Energy Complex, Building B, 9th Floor, Vibhavadi Rangsit Road, Chatuchak, Bangkok 10900 Tel. +66 (0) 2649-7511 Fax. +66 (0) 2649-7550 Type of Business: Sale of polymers and resins

59.98%

IRPC Clean Power Co., Ltd. Address: 299 Moo 5, Sukhumvit Road, Choeng Noen, Rayong Tel. +66 (0) 3861–1333 Fax. +66 (0) 3861–2813 Type of Business: Generation and sale of electricity and stream

48.99%

3,083

UBE Chemicals (Asia) Public Company Limited Address: 98 Sathorn Square Office Tower, 18th Floor, North Sathorn Road, Silom, Bang Rak, Bangkok 10500 Tel. +66 (0) 2206-9300 Type of Business: Production and sale of pertochemicals

25.00%

10,739

112

2017 Annual Report IRPC Public Company Limited

No.

Company

% of shares holding

Paid- up Capital (Million Baht)

PTT Energy Solutions Co., Ltd. Address: 555/1 Energy Complex, Building A, 4th - 5th Floors, Vidhavadi Rangsit Road, Chatuchak, Bangkok 10900 Tel. +66 (0) 2140-2000 Type of Business: Engineering Consultancy

20.00%

150

Sarn Palung Social Enterprise Co., Ltd. Address: 555/2 Energy Complex Building B, 5th Floor, Vibhavadi-Rangsit Rd., Chatuchak, Bangkok 10900 Type of Business: Supporting execution of social enterprise

15.00%

2.5

10.

Rayong Acetylene Co., Ltd. Address: 2/3 Moo 14, Bangna-Trad Road, Km. 6.5 Bang Kaeo, Bang Phli, Samut Prakan Tel. +66 (0) 2338-6100 Fax. +66 (0) 3862-1602 Type of Business: Production and distribution of acetylene gas

13.04%

115

Remarks: - The Board approved the increased selling of investment funds of IRPC Polyol Company Limited of approximately 25 percent to PCC Rokita SA, Poland on December 20, 2017. After such selling, the ratio of shareholders will be 50:50 - Illustrate only the companies with an operation.

113

Shareholding Structure

Shareholding Structure As of February 24, 2017, the closing date of the share register book, IRPC’s top ten shareholders were as follows. Name

% shares

1. PTT Public Company Limited

7,869,694,600

38.51

2. Government Savings Bank

1,950,000,000

9.54

3. Thai NVDR Company Limited

1,704,884,129

8.34

4. CHASE NOMINEES LIMITED

437,751,314

2.14

5. Social Security Office

301,477,200

1.48

6. STATE STREET BANK AND TRUST COMPANY

299,506,147

1.47

7. STATE STREET BANK EUROPE LIMITED

268,791,579

1.32

8. HSBC (SINGAPORE) NOMINEES PTE LTD

176,023,417

0.86

9. PEOPLE'S BANK OF CHINA

134,589,600

0.66

10. EAST FOURTEEN LIMITED-DIMENSIONAL EMER MKTS VALUE FD

121,938,200

0.60

Note: (1) PTT Public Company Limited as the Company’s majority shareholder has a part in setting the policy, management and operation of the Company through the approval of the Board of Directors of the Company as at December 31, 2017. It has four out of 15 persons who are directors or executives of PTT Public Company Limited. (2) Thai NVDR, a subsidiary of the Stock Exchange of Thailand (SET), engages in the business of issuing NVDRs (non-voting depository receipts), a listed form of SET securities. NVDRs are sold to investors, the proceeds of which are invested in SET-listed Thai reference securities. Investors in NVDRs are eligible for financial benefits, including dividends and the right for booking recapitalization shares as if they were shareholders of listed companies, but they are ineligible to vote at AGMs. Information about investors in Thai NVDR appears at www.set.or.th. (3) The Company has no shareholding agreement in matters affecting the administration of the Company. (4) Shareholders who were foreigner could hold shares of the company amounting to not more than 49 percent of the total issued and paid-up shares as of February 24, 2017. The Company’s shares held by foreigners amounted to 12.50 percent of total shares and had a free float of 47,472 cases, representing 51.60 percent.

Dividend Policy

IRRC Public Company Limited

IRRC’s policy is to pay dividends at no less than 25% of its annual net profit after tax and all capital provisions, as required by IRPC’s regulations and by law. Such dividend payment is subject to its investment plans andother obligations as seen fit by the Board.

Affiliates

Each affiliate will separately consider its own dividend payment, taking into account its cash flow balances ornet profits, or both, against its reserved investment budget as required by law, or against other obligations as seen fit by each affiliate’s Board.

114

2017 Annual Report IRPC Public Company Limited

BUSINESS STRUCTURE BUSINESS STRUCTURE AND SHAREHOLDING NATURE OF BUSINESS INTEGRATED REFINERY AND PETROCHEMICAL COMPLEX FLOW CHART PRODUCTS MARKET OVERVIEW AND INDUSTRY OUTLOOK REVENUE STRUCTURE CONNECTED TRANSACTIONS

116

2017 Annual Report IRPC Public Company Limited

Business Structure and Shareholding IRPC Public Company Limited

Petroleum Business

Petrochemical Business

Refined Product Distribution

Manufacturing and Distribution of Petrochemical Products

- Naphtha - Gasoline - Diesel - Fuel Oil - Lube Base Oil - Asphalt

99.99% IRPC Oil Co., Ltd.

(Refined Product Distribution)

- Olefins - Aromatics - Polyolefins - Styrenics

74.99%

25% PCC Rokita SA

IRPC Polyol Co., Ltd.*

(Polyol Manufacturing and Distribution)

Supporting Businesses - Power and public utilities - Port and tank services - Asset management business

99.99% IRPC Technology

(Vocational School)

99.99%

Rak Phasak Co., Ltd.

(Marine Transportation Services)

59.98%

37% Nippon A&L Co., Ltd. 3% Other

IRPC A&L Co., Ltd.

(Stryenics Distribution)

48.99%

51% Global Power Synergy Co., Ltd.

IRPC Clean Power Co., Ltd.

(Manufacturing and Distribution of Electricity and Stream)

UBE Industries Limited Co., Ltd.

25.00%

74% UBE Industries Limited Co., Ltd. 1% Other

Ube Chemicals (Asia) Plc.

(Manufacturing and Distribution of Petrochemical Products)

40% PTT Plc. 20% PTT Global Chemical Plc.

20.00%

20% Thaioil Plc.

PTT Energy Solutions Co., Ltd. (Engineering Consultancy)

Remark: - The Board approved the increased selling of investment funds of IRPC Polyol Company Limited of approximately 25 percent to PCC Rokita SA, Poland on December 20, 2017. After such selling, the ratio of shareholders will be 50:50 - Illustrate only the companies with an operation.

117

Nature of Business

Nature of Business Equipped with a refinery and petrochemical complexes located in its own Rayong industrial zone, IRPC is an integrated petrochemical pioneer in Southeast Asia. The zone fully contains infrastructure and basic utilities supporting industries, including a deepsea terminal, oil tank farm, and a power plant. Below is a business description of IRPC: petroleum, petrochemical, and supporting businesses.

Petroleum Business Consisting of ADU1 (65,000 bpd) and ADU2 (150,000 bpd), IRPC’s oil refining unit commands a total capacity of 215,000 bpd. The refinery (the third largest in Thailand) yields LPG, naphtha, gasoline, and diesel. Its Lube Base Oil Group 1 plant (with the largest domestic capacity) boasts a total capacity of 320 KTA, whereas an associated asphalt plant’s total capacity is 600 KTA. IRPC is also a producer of raw materials for well-known rubber process oil, whose quality has won international quality acceptance under the Terramaxx brand.

Petrochemical Business IRPC’s upstream products consist of olefins (1,221 KTA capacity) and aromatics (367 KTA capacity), both serving as downstream feedstock. Sold under the POLIMAXX brand to domestic and international plastic manufacturers, polyolefins consist of HDPE, PP, and polyol (940 KTA capacity); and styrenics (ABS, SAN, EPS, and PS) (334 KTA capacity). IRPC’s petrochemical business strives for growth and keeping pace with global change, developing the quality of life, together with enhancement of international competitiveness by inventing and creating innovative styrenics products, namely Green ABS, ABS powder, impact modifier–MBS, anti-dripping additives, and anti-bacterial products, and innovative polyolefins, namely UMHW-PE, polyolefins catalyst, baby-bottle polypropylene, and antimicrobial compounds.

118

2017 Annual Report IRPC Public Company Limited

Supporting Businesses Power and public utilities

IRPC provides electricity, steam, and basic public utility services along with other public utility systems, including sale and lease of land for industrial purposes, and other land. IRPC produces, sells, and provides services for electrical and public utility systems as described below: 1. Electrical: 22 Kv, 115 Kv electrical systems, 25 Bar, 45 Bar steam systems. A gas-fired combined heat and power plant is in place, as is a 328-MW coal-fired power plant. An energy dispatch center controls power and steam distribution for maximum stability, and a loop line transmission system constantly boosts power consumption system security. During turnarounds, the plants has continued to distribute power for more than 1,700 days with zero blackout since April 19, 2012 2. Water: Filtered, demineralized, cooling, raw, and firefighting water for industrial purposes. IRPC is given a raw-water quota by the Royal Irrigation Department and has its own 5-million-cubic-meter reservoir along with two water filtration works at Amphoe Ban Khai and IRPC Industrial Zone for the security of industries through continued supply 3. Pneumatic: Nitrogen, instrument air, and plant air for industrial purposes, produced by IRPC’s own unit. IRPC also allies directly with leading pneumatic industry producers 4. Wastewater treatment: The membrane bioreactor plus activated carbon adsorption (MBR Plus AC) system contains very efficient bioreaction processes operated under a stable system. Treated water commands quality that regularly passes standards in order to boost the confidence of communities and the environment in a sustainable way.

Port and tank services

These services consist of ports or terminals for transfer of domestic and international cargoes. This is a deepsea area of the Eastern Region at Amphoe Muang, Rayong, featuring infrastructure, facilities, and international-standard dock services. Available

services include liquid tankfarms for petroleum products and petrochemicals along with modern management systems that are both efficient and safe. Tankfarm facilities located in different regions, namely Rayong Oil Depot, Phra Pradaeng Oil Depot, Ayutthaya Oil Depot, and Chumphon Oil Depot accommodate customers’ needs, which supplement the competitiveness of the industrial markets in Thailand. Below are the service details. • Bulk & container terminal (BCT): At 900 meters long and 44 meters wide, the six sub-wharfs handle vessels ranging from 800 to 150,000 DWT, serving general cargoes, including iron ores, palm shells, coal, granite, fertilizers, and infrastructural items. The current annual cargo volumes exceed 2 million tons. The terminal handles over 260 vessels a year. • Liquid & chemical terminal (LCT): This petrochemical-liquid & petroleum terminal handles petrochemicals, liquid petroleum, and gaseous cargoes. At 1,623 meters long, the port features six sub-wharfs, handling vessels ranging from 1,000 to 250,000 DWT. The annual cargo volume is about 15 million tons (more than 2,100 vessels). • Tank farm service: Service is provided through more than 300 tanks for liquid petroleum and petrochemical products with a storage capacity of 2.9 million tons, designed to accommodate IPRC’s oil product distribution and third parties alike. Equipped with efficient management systems of international standards, IRPC’s team is also experienced. Four IRPC oil depots are located in Rayong, Phra Padaeng (Bangkok), Phra Nakhon Si Ayutthaya, and Chumphon. Each depot features a jetty to accommodate cargo transfers for efficient operation and merchandise distribution to save costs and shorten transport time.

IRPC Solutions provider business

This is designed to provide full support to investors in IRPC Industrial Zone along with skilled and professional personnel so that their businesses may grow in tandem with those of IRPC, particularly thanks to extra convenience and service speed. IRPC’s services are described below. 1. Maintenance services: Services are provided by experienced, specialized, and skilled teams

119

engaging in the petrochemical business, oil refining, power generation, and other plants, services consisting of plant, machinery, metering instrumentation, electrical maintenance as well as engineering inspection 2. Analytical laboratory services: Equipped with laboratories referenced to ASTM, ISO, DIN, JIS, and AWWA international-standard testing methods, IRPC commands quality assurance systems that are precise and credible. Sophisticated test gear and computerized control programs are in place, certified by ISO/IEC 17025, ISO 9001, ISO 14001, and OHSAS 18001, with around-the-clock service 3. Calibration services: IRPCâ&#x20AC;&#x2122;s calibration laboratory and its Metrology Center have earned ISO 17025 certification and are equipped with advanced equipment and highly experienced calibration technicians performing international-standard procedures and methodologies. IRPC can issue calibration certificates for all equipment that are verifiable against national standards 4. ICT services: IRPC provides ICT services and consultation on systems for all components of businesses, with ICT infrastructure service data center service, ERP/SAP consultant & service, and an ICT training center 5. Engineering services: Services consist of engineering design, planning and estimating, project control, project procurement, documentation and reports, and project management 6. Logistics services: These include transportation services, warehousing and distribution center, and customs clearance 7. IRPC Safety Standard Center (ISSC services): This center offers industrial-standard safety training 8. Truck scale services: Truck and trailer weighing with advanced standard equipment located in IRPC Industrial Zone 9. Materials and Corrosion Center (MCC service): Metallurgical services are available along with sophisticated equipment, consisting of failure investigation, materials and corrosion consultancy services, plant corrosion survey and assessment, corrosion monitoring system, corrosion testing, and technical support service packages.

Asset management business

IRPC manages high-potential land in Rayong and other provinces with a total acreage of some 12,000 rai to develop such land into EIZ (Eco-Industrial Zone) projects, including land for industries and highpotential land supporting industrial economic sector expansion that accommodates the Eastern Economic Corridor Development Project (EEC)-an investment promotion policy under public policy. Three groups make up this business. 1. Industrial zone project: IRPC Eco-Industrial Zone, Amphoe Muang, Rayong: This project is current full of infrastructural and public utility systems, focused on becoming the hub linking the ecology and production chains of materials or upstream products, consisting of an integrated refining and petrochemical industry, heading for the downstream petrochemical industry and direct downstream industry-the heart of modern industries accommodating advanced technological industrial groups. 2. Industrial estate project: Rayong Industrial Estate (Ban Khai), Amphoe Ban Khai, Rayong: IRPC won approval for joint undertaking with the Industrial Estate Authority of Thailand in developing this industrial estate to accommodate futuristic industrial groups, consisting of next-generation automotive and smart electronics industries. 3. High-potential land: Large plots of development-potential land, Amphoe Chana, Songkhla, of about 2,200 rai, with a potential for development into areas supporting industries and into commercial areas to accommodate enlargement of the deepsea port development project and public-sector power plants. This includes other high-potential land in Rayong, Chiang Mai, and Lamphun, which are of smaller acerage and where development plans are upcoming to grow their values through sale or through lease for agricultural purposes, commercial buildings, housing estates, and management for land tax purposes.

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Integrated Refinery and Petrochemical Complex Flow Chart

CRUDE OIL

PETROLEUM

REFINERY 215 KBD

PETROCHEMICAL

Propylene 132 KTA

Propylene 320 KTA

DCC

ADU 1 65 KBD

RDCC (UHV) Ethylene Rich Gas

Ethylene 73 KTA Ethylene 320 KTA Propylene 280 KTA

ADU 2 150 KBD

Naphtha

Acetylene 6 KTA

OLEFINS Butadiene 56 KTA Pyrolysis Gasoline

Reformate

Toluene 132 KTA

AROMATICS

Mixed Xylene 121 KTA

LS ATB Benzene 114 KTA HS ATB

VGO

EBSM 260 KTA LUBE BASE OIL

NATURAL GAS COAL

POWER PLANT

220 MW 108 MW

Styrene Monomer 260 KTA

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Integrate Refinery and Petrochemical Complex Flow Chart

FINISHED PRODUCTS LPG, GASOLINE, DIESEL, FUEL OIL

FUEL

PP 775 KT A

CONSUMER PACKAGING, DRINK BOTTLES

HDPE 140 KTA

HDPE

CONSUMER PACKAGING, DRINK BOTTLES, PIPES, ROPES, FISHING NETS

ACETYLENE BLACK

DRY CELL BATTERY, RUBBER COMPOUND

POLYOL 25 KTA

POLYOL

ALEXIBLE FOAMS, ADHESIVE ELASTOMERS AND FOOTWARE APPLICATION

IRPC Polyol Co., Ltd.

TOLUENE

SOLVENTS AND RAW MATERIALS FOR PETROCHEMICAL PLAN

MIXED XYLENE

SOLVENTS AND RAW MATERIALS FOR PETROCHEMICAL PLANT

ABS / SAN

PLASTIC TOYS, ELECTRICAL APPLIANCES, AUTOMOBILE

TAPE CASES, CD CASES, ELECTRICAL APPLIANCES

EPS

RIGID FOAM INSULATION, PROTECTION

LUBE BASE OIL 320 KTA

LUBRICANT

TDAE 50 KTA

INGREDIENT IN TIRES

ASPHALT 600 KTA

CONSTRUCTION MATERIALS FOR ROAD

ACETYLENE BLACK 4 KTA

PROPYLENE OXIDE

ACRYLONITRILE 27 KTA

USES

ABS/SAN 179 KTA

PS 125 KTA

EPS 30 KTA

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Products IRPC and its subsidiaries produce and distribute petrochemical and petroleum products as detailed below.

Petroleum Products 1. Fuels

• Gasoline–Fueling gasoline-engine vehicles, gasoline is classified by octane number, which indicates resistance to engine knocking. Under government regulations, gasoline consists of ULG91, GSH95, GSH91, and gasohol base-the base oil for gasohol and E20. • Diesel–Fueling high-speed diesel engines in the industrial sector, diesel is common in vehicles like cars, trucks, fishing trawlers, passenger boats, and tractors. At present, a blend of 5-7% of biodiesel is required by government policy to promote alternative energy. • Fuel Oil–Fuel oil, the portion of crude with a high boiling point, is commonly used in the industrial and transport sectors as well as in power generation. • LPG–Liquefied petroleum gas (LPG), is a compound of hydrocarbons, mainly propane and butane, and is common in household kitchens and various industries, and can also replace gasoline in gasoline engines.

- 150 BS is used in industries and heavy-duty engines with high friction, such as engines of trucks, trains, and marine vessels. • Long Residue-is a heavy distillate obtained from refining processes with applications as raw material for lube base oil. In addition to these products, IRPC features innovative lube base oil, namely Treated Distillate Aromatic Extract (TDAE) and Residue Aromatic Extract (RAE). These find applications as raw materials for automotive tires with reduced polycyclic aromatic hydrocarbons (PAHs), a carcinogen, to demonstrate concerns for consumers’ health.

3. Other Petroleum Products

• Naphtha–meaning light distillates obtained from oil refining processes, is major petrochemical feedstock. • Asphalt –is a compound of assorted hydrocarbons and other organic substances collectively called bitumen. Thick and viscous, asphalt is the heaviest portion obtained from refining processes used for road pavement and waterproof materials.

LOCAL REFINERIES’ CAPACITIES AND DOMESTIC MARKET SHARES (2017)

2. Lube Base Oil

• Lube Base Oil-consists of heavy distillates used for producing different grades of lubricants. At present, IRPC produces various grades for different purposes: - 150 SN is used as a raw material for lubricants for the manufacturing industry, such as automotive and transport. - 500 SN is used as a raw material for lubricants in most vehicles.

TOP

28%

PTTGC

17%

TOTAL OUTPUT

IRPC

17%

KBD

SPRC

14%

ESSO

13%

BCP

11%

1,052

Source: Department of Energy Business (January– December 2017)

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Products

Petrochemical Product 1. Olefins

Olefin products, namely ethylene, propylene, and butadiene, are feedstock for polymers, namely polyethylene (PE) and polypropylene (PP). IRPC produces 828 KTA of olefins, comprising 360 KTA of ethylene, 412 KTA of propylene, and 56 KTA of butadiene. Most of these olefin products serve as feedstock for various plants in IRPC Group. Moreover, a by-product from the olefin plant, acetylene black-black powder with outstanding purity and high electrical conductivity-is commonly used as a raw material for batteries, polymers, and rubber products. At present, IRPC has a capacity of 4 KTA.

2. Aromatics

Aromatic products (BTX), namely benzene, toluene, and xylenes, are feedstock for styrenic polymers. At present, IRPC has a capacity of 367 KTA of aromatics, which basically serve as feedstock for other plants in IRPC Group. Part of the output is for sale.

3. Polymers

IRPC produces polymer products of the ‘POLIMAXX’ brand. Categorized as a downstream petrochemical, polymers yield various plastic products. IRPC’s polymers fall into the polyolefins group, comprising HDPE and PP, and the styrenics group, comprising ABS, PS, and EPS. Each polymer type possesses distinct properties, serving different purposes:

3.1 High-Density Polyethylene (HDPE)

HDPE is a polyethylene product with high density. In-line compounding makes IRPC’s HDPE suitable for molding such as pipe extrusion, especially for making water pipes and electrical conduits due to its high resistance to traction and impact. It also boasts high flexibility and high resistance to changing ambience conditions.

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3.2 Polypropylene (PP)

PP is very similar to HDPE and LDPE and can often replace them. However, PP is tough and strong, with higher resistance to heat and tolerance to pressure and impact. It is strong and tough, not easily corroded, and is chemical-resistant, perfect for producing electrical insulation. PP is generally suitable for the following conversion methods: • Film-PP is used for producing clear plastic sheets for heat-resistant bags, packaging film, and food-packaging film. • Filament/ Yarn-PP is used for woven sacks, onion and garlic bags, and canvas. PP filament comes in two forms: mono-filament, used for heavy-duty ropes such as giant ropes, and multi-filament, used for making belts and bag holders. • Injection Molding-PP is used for household products, kitchen utensils, car parts, electrical appliance parts, battery covers, paint kegs, and outdoor furniture. • Blow Molding-PP is suitable for conversion into clear products which need a hard surface that can resist acids and alkalis. PP is clean and highly safe for making bottles for food and cosmetic products. • Sheet Extrusion-Because of its right properties to form into different shapes, PP has now become more common for sheet extrusion. Recyclable and reasonably priced, it is popular for making document files, vacuum forming work such as packaging, including water cups and trays. 3.3 Acrylonitrile-Butadiene-Styrene (ABS) With properties of high-impact strength, high gloss, high heat resistance, high stiffness and high rigidity, and high chemical resistance, ABS is commonly used for: • Injection Molding-The method is to inject polymers into various shapes and forms of molds suitable for making: • Electrical Appliances–such as parts of rice cookers, irons, phone sets, electric fans, computer keyboards, and television sets due to high resistance

to heat and its glossy surface. Due to its high flow rate and flame retardation, ABS is also easy for metal plating. • Car Parts–such as side mirrors, glove compartments, dashboards, and motorcycle parts such as the dashboard, mask, radiator guard, mudguard, and safety helmet. This is because of its high heat resistance with high strength and durability. It also has high-impact strength, good adhesion to paint, resistance to solvents like thinner, and a glossy surface. • Household Appliances–such as furniture parts and sanitaryware because of its high gloss, high impact strength, and high chemical resistance. ABS is also good for metal plating. • Toys–Since ABS is strong and not brittle, even when broken, it makes no sharp point that harms children. It also has high gloss, which gives bright colors. • Extrusion-Polymers can be extruded into thin sheets and vacuum-molded into various forms, such as refrigerator walls.

3.4 Acrylonitrile Styrene (SAN)

Transparent, strong, rigid, and tough, SAN (or AS) is heat-resistant and more chemical-resistant than PS and is commonly used for injection molding, such as: • Car Parts–such as headlight lenses, tail lights, and parts of turning signals. Due to its lower cost, SAN often replaces PMMA. • Household Appliances–Thanks to its unique properties, SAN is commonly used for household appliances such as sanitaryware, lighters, and containers. • Electrical Appliances–such as fan blades, air-conditioner covers, and fruit juice blenders due to its properties of gloss, stable form, heat resistance, chemical resistance, and particularly shear resistance.

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Products

3.5 Polystyrene (PS)

PS is made up of two categories based on its properties: • GPPS (General-Purpose Polystyrene) GPPS is PS polymer with high clarity and rigidity, easily molded into various forms without pre-heating. However, it has low-impact strength. It is commonly used for making products that need clarity and a rigid form, such as tapes or CD cartridges, electrical appliances, and household appliances. • HIPS (High-Impact Polystyrene) HIPS is PS polymer with higher impact strength than GPPS as a result of blended butadiene in product development, which deprives HIPS of some clarity. Since it is much cheaper than ABS, it often replaces ABS for economic reasons. HIPS, however, has less gloss and a less stable form. GPPS and HIPS are generally used for - Injection Molding-such as cartridges for tapes and CDs, and household appliances - Sheet & Film Extrusion-such as ice-cream cups and flower-wrapping film.

3.6 Expandable Polystyrene (EPS)

IRPC’s EPS is white, round polymer using styrene monomer as the main feedstock and pentane gas as a blowing agent without using CFC, which is not ozone-friendly, in its production process. EPS can be used in the following ways: • Packaging-such as shock-absorbing foam used in the packaging and electrical appliance industries • Block-such as heat insulation in the fishery industry’s cold storage, construction, and decoration work.

4. Polyol

Polyol products, consisting of polyester and polyether polyol, is feedstock for polyurethane, which can be further converted into various products, such as foam for furniture work, heat insulation in construction work and refrigerating appliances, and for making shoe soles. Imported propylene oxide serves as polyol’s main feedstock. IRPC Polyol Co., Ltd, 74.99%-owned by IRPC, is the producer and distributor of polyol products. It has a capacity of 25 KTA and is located in the same industrial zone as that of IRPC in Rayong.

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5. Specialties and Innovative Products

IRPC highly values constant R&D through the self-development approach in response to customers’ diverse needs and dynamic environment. It can therefore best fulfill customers’ expectations while taking care of the environment. Specialties comprise the following: 5.1 Styrenics products: • Green ABS–IRPC, the world’s first producer of Green ABS, has already filed a patent for its processes, in which natural rubber replaces synthetic rubber in the innovative processing of ABS. The product can be used in a support program for farmers, resulting in reduced imports while observing the Clean Development Mechanism (CDM) initiative. Below are product details. • Anti–dripping additive–IRPC’s nanotechnology is applied to the development of this additive, which prevents polymers from dripping when heated. The additive can disperse well in polymers and can be kept at the ambient temperature so as to lower the cost of product storage and distribution. The additive is suitable for mixing in various polymers to enhance flame retardation under UL-94 (V.0) standards. IRPC has now employed the additive in quality improvement of ABS-Flame Retardant Grade polymers. • Anti–bacterial agent–This new product is also developed by means of nanotechnology. Stunting growth of and killing bacteria, the agent can serve as an additive in various plastics (ABS, PS, or PP) to check the growth of bacteria in the products while doing no harm to the properties of polymers. • ABS Powder–ABS Powder is a powdery polymer suitable for manufacturers who want polymers with better dispersion of polymers than conventional plastics. ABS powder can be used with PVC, PC, or PC/ABS to enhance impact strength and heat resistance.

5.2 Olefins group, featuring: • Ultra-High Molecular Weight Polyethylene (UHMW-PE)-UHMW-PE resembles cloudy white, opaque powder with as much as 10 times higher molecular density than other PE varieties. It can be converted through various methods, such as compression, RAM extrusion, and gel-spinning, and can be used from -200 to 200 degrees Celsius. Thanks to better properties than those of iron joints and gear, UHMW-PE suits work that needs toughness, strength, resistance to traction, and chemical erosion. • Baby-Bottle Polypropylene-This is a new option of plastics developed for easy conversion, both injection and blowing methods. The product can tolerate high (over 100 degrees Celsius) heat. It has a stable form, high clarity, and low shrinkage while containing no carcinogens, thus safe for babies. • Antimicrobial compound-This is a product in the polyolefins group, the properties of which are enhanced to prevent bacteria without harming the usual polymer properties. Upgrading the quality of life with its high safety standard, the product is popularly used in the food packaging industry and medical circles, as well as household appliances.

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Products

• Marine Pipes-This compound is made with a special formula to prevent pipe surfaces from shellfish piercing along coastlines and in brackish water areas. • Natural Coloring and Additive Carrier System - Natural Coloring-This polymer has a mixture of natural extract colors to reduce the use of synthetic petrochemical colors, such as green from spinach and brown from caramel, to reduce poisonous and heavy-metal resi dues. The durability of natural colors is the same as that of synthetic colors. - Master Batch Carrier-This new HDPE product is white powder that blends well with color powder and additives. With a flow index of as high as 33 grams/ 10 minutes, this HDPE can

enhance the dispersion of color powder and additives. - Wood Plastic Composite–Valuing natural conservation, IRPC blends natural wood powder into the process of alkaline plastics. The mixture is then converted into new products that retain the outstanding properties of both plastics and wood and can fill in for natural materials. This promotes cost-effective use of resources.

Domestic Polymer Producers and Domestic Production Capacities (2017) Product

Company

Capacity

HDPE

IRPC Plc

140

Thai Polyethylene Co., Ltd.

960

Bangkok Polyethylene Plc

500

PTT Global Chemical Plc

300

Total

1,900

100

IRPC Plc

775

HMC Polymers Co., Ltd.

810

Thai Polypropylene Co., Ltd.

720

Total

2,305

100

ABS

Thai ABS Co., Ltd.

179

Ineos ABS (Thailand) Co., Ltd.

Total

274

100

EPS

Thai ABS Co., Ltd.

Mingdi Chemical Co., Ltd.

Total

100

Thai ABS Co., Ltd.

125

Siam Polystyrene Co., Ltd.

150

Thai Styrenics Co., Ltd.

Total

365

100

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Market Overview and Industry Outlook

1 Petroleum Market and Competition Crude Oil and Product Market

This year’s energy consumption in Thailand rose 2.4% from last year in line with its annualized GDP of 3.9% due to the rebounding Thai economy coupled with growth in exports, private consumption, and public spending and overall investment. In the meantime, industries rebounded in wholesale and retail sales, power, natural gas, and fishery, not to mention transport and communication, hotels, and restaurants. All these were a boon to the Thai energy picture this year. Primary energy consumption rose 2.4%, consisting of oil (2.3% up), renewables (6.5% up), coal/lignite (0.2% up), and imported power (22.8% up) due to the rising hydropower imports from Laos. Meanwhile, natural gas consumption, which took the traditional lion’s share of 33%, dropped 0.3%, since this year natural gas distribution from several fields was suspended. Consumption of high-speed diesel this year averaged 63.86 million liters a day, a 2.6% rise from last year. Its retail sales price averaged Baht 25.39/ liter, eclipsing last year’s by 11.54% (Baht 2.63/liter). Diesel sales by service stations and to the industrial sector surged this year. Consumption of gasoline rose 3.8% in line with the rising numbers of passenger cars and motorcycles (19.95%). Its retail sales price averaged Baht 26.48/ liter, beating last year’s price by 12.28% (Baht 2.90/ liter). Land transport consumption for the first nine months inched up 0.39% with greater consumption of gasoline and diesel. Consumption of LPG and NGV still continued to drop in line with the shrinking numbers of cars powered by these fuels probably because users switched back to gasoline and diesel, whose prices were not excessive, coupled with the smaller number

of LPG-powered and NGV-powered vehicles together with the public policy to restructure fuel prices to illustrate true costs. The main domestic players are PTT, Esso, Bangchak, Shell, Chevron, and others. Their domestic market shares this year were as follows.

Company

Domestic market share (%)

PTT

39%

Esso

12%

Bangchak

10%

Shell

Chevron

IRPC

Other retail sellers

19%

Source: Dept. of Energy Business (Jan.–Dec. 2017)

Crude Oil Market and Situation

This year the crude oil price range was USD 53-64/bbl, averaging USD 53.2/bbl for the year in contrast with USD 41.4/bbl last year. The hike was noticeable toward the year-end due to the declining surplus crude volume after healthy growth in oil demand. The global oil demand grew 1.5 million bbl/ day to 97.7 million bbl/day, thanks to the recovery of the global economy and the declining US crude oil stocks. Also contributing to this hike was OPEC’s meeting on November 30, where OPEC and non-OPEC producers agreed to extend the period for their agreement to cut output capacities by 3-9 months from the original ending date of March 2018, designed to preserve oil price stability. Meanwhile, the producers managed to cut their outputs to near the agreed goals, thus supporting decent prices.

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Market Overview and Industry Outlook

In addition, support came from the situation in the Middle East, where tension brewed over the conflicts between Saudi Arabia and Iran in Lebanon and Yemen; Venezuela’s output capacity that dropped to a 28-year low by 2 million bbl/day; the emergency maintenance shutdown of the oil pipeline from Canada to the US in the wake of an oil spill discovery, which resulted in less crude oil being transported to the US. At any rate, the US still commanded high outputs of oil, still relentlessly rising-thus exerting pressure on long-term price prospects.

Price Outlook

For 2018, it is expected that Dubai will cost more than this year and hover in the USD 60-65/bbl range, supported by strong demand rises of 1.3 million bbl/ day toward 98.9 million bbl/day in line with the robust recovery of the global economy, both the leading economies and new economies. In addition, major factors supporting this oil price rise include cooperation between OPEC and non-OPEC countries,

led by Saudi Arabia and Russia, on extending the end period of output cuts totaling some 1.8 million bbl/day from in March 2018 to December of the same year; Nigeria and Libya have agreed to join this agreement after being exempted because of domestic unrests. The goal for reduction of OECD stocks now stands at its five-year average. As for market downsides in 2018, geopolitical risks in the Middle East, namely Iraq and Libya, and in Venezuela and Nigeria, are to be closely monitored because they might aggravate tight oil supply. And yet, the adjustment toward equilibrium in the crude market is risky, since the market could return to a glut due to the relentless expansion of about 1.4 million bbl/day in non-OPEC countries’ outputs, most of which come from the US, which is expected to add about 700,000 bbl/day amid rising prices. This could add a tremendous volume to surplus supply and thwart producers’ long-term efforts to push the market back toward equilibrium-a pressure on prices, in short.

Factors affecting crude oil price in the world market Dubai crude oil price (USD/bbl)

Dtd Brent May: pre-agreement on May-16 (Russia + KSA) and agreement on May-25 for a 9 months extension

Dubai

Bullish sentiment on early January despite US concerns

March-June-Mid-Term bearish trend fuelled by 30-Nov: 9 month deal extension until the end of 2018 with an “exit option” in June

US context (rising stocks)

Strong bullish trend on H2-2017, fuelled by OPEC efforts, US Hurricanes, Middle-East tension, Forties incident and deal extension expectations

Implementation of the OPEC/Non-OPEC reduction deal

Jan 17 Feb 17 Source: Platts & Reuters

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

Oct 17

Nov 17

Dec 17

Jan 18

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Customers and Distribution Channels

IRPC focuses on keeping fuel product quality control on a par with the Ministry of Commerce standards and on sale through channels with maximum profits, while setting prices in harmony with market situations and cooperating with affiliates for optimal benefit in strategizing sales. Below is information about customers and distribution channels. • Sales to direct traders and industry, including car companies, cargo tankers and vessels, buses, construction firms, and others, including sales to affiliates • Wholesale and sales to jobbers (small and major) that sell products to direct and retail sellers • Sales to Article 7 traders, meaning major and medium-size oil traders equipped with their own depots and who distribute these fuels through their own networks and through their distribution channels to downstream consumers • Export to overseas oil traders, broken down into tanker sales (with the main markets in Asia, including Singapore, Cambodia, and Vietnam) and truck sales (with the main markets in Indochina, including southern China, Cambodia, Laos, and Myanmar). This year IRPC commanded 35% of the total sales through exports • Bunker sales means sales of diesel or automotive diesel oil (ADO) to vessels berthing at IRPC terminals • Fishery sales means sales of the green diesel type to Thai Seas Fishery Association. IRPC commanded a 52% market share this year.

Proportions of Fuel Sales The table below shows IRPC’s proportions of fuel sales this year. Type of sale

Proportion (%)

1. Wholesales

27%

2. Export (including fishery)

41%

3. Sales to Article 7 customers

30%

4. Sales of industrial users

Source: IRPC’s Petroleum Business Department

Competitive Strategies

IRPC stresses sales strategies of maintaining product quality standards, meaning clean energy of standard quality from its refinery together with quality services through the most advanced and systematic ordering system. IRPC pioneered regional petroleum businesses with its PDA on Mobile system via the IRON system. It increases the number of customers and sales volumes by way of suitable marketing margins. Described below are its services. • Depots: Five depots serve regional customers, with the Rayong Depot open around the clock. This year an oil sales point was added at the IRPC Mae Klong Oil Depot, Samut Songkhram, to add services to customers in the West and upper South • Transport: Oil trucks deliver fuels to customers across the country, including tankers, vessels, and ports/ terminals • Personnel: Sales agents and sales coordinators, as well as the sales service department, serve customers. A ticket-issuing office takes fuel purchase orders from customers through the SAP system, which manages connected databases. SAP can update online and real-time data for accuracy and uniform standards, thus raising operating efficiency and getting rid of redundancies. SAP also provides databases supporting analysis, decision-making, and administration for all executives and workers. IRON (IRPC Oil on Net) is an electronic sales administration system that combines the caliber of the supply chain administration system with the developed Total Business Solution to meet the needs of customers’ transactions and raise their business efficiency. At the same time, IRPC keeps on improving its systems to accommodate applications in assorted phases to in turn accommodate sales through other channels • Quality inspection: IRPC’s technical officers serve, educate, and solve problems for customers, apart from visiting service stations and oil depots to check on quality and boost customers’ confidence in quality.

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Market Overview and Industry Outlook

2 Petrochemical Market and Competition Competition

The total export and import values of petrochemicals this year dropped 10.17% and 8.81% due to oil price volatility of the main raw material feedstock, which was in down-cycles, together with the fragile recovery of the world economy, particularly the economy of Thailand’s key export markets, namely China, the US, the EU, and Japan. This year’s domestic economy was projected by NESDB to grow by 4.3% from 3.8% in the previous quarter the highest growth rate over 18 quarters. As for expenses, supporting factors arose from the expanding merchandise exports and the continued growth in private consumption, public spending, and overall investment. Concerning manufacturing, industrial manufacturing showed clear signs of recovery and better supported the economy. The domestic economy of Q3/2017 grew 1% from Q2/2017. Finally, the first nine months showed 3.8% growth. This year IMF also raised its projection of world economic growth to 3.6%, which was 0.1% over its July estimate. IMF viewed healthy short-term growth for several regions, particularly the new economies. When compared with previous estimates of April and July, economic growth projections for the leading economies were marked up: Eurozone (2.1% this year and 1.9% for 2018), Japan (1.5% and 0.7%). In contrast, Asian new economies like China would grow 6.8% and 6.5%; India, 6.7% and 7.4%; on the whole, the new economies and developing countries, 4.6% and 4.9%. Yet, IMF was less upbeat in projecting the US economy because of political uncertainty, whereas they viewed the UK economy as still exposed to Brexit risks. It estimated that the US economy would grow 2.2% this year and 2.3% in 2018, which caused IMF to expect no additional stimulus one normally expects from the tax reform policy. As far as the UK economy is concerned, the agency pared its projection in line with the more subdued growth of

the first half of the year, as domestic consumption growth proved sluggish and the pound weaker. It was also viewed that the UK’s medium-term growth could pose great uncertainty due to Brexit impacts on international trade and international financial activities. Below are factors or events that could inhibit growth in the world economy: 1. Tighter money supply as a result of higher long-term interest rates, whereas headline inflation remains low 2. Increased debt problems in China 3. Debt-financing and payment in the new economies and countries relying on loans, which would have a higher cost of funds as a result of soaring overall interest rates 4. Risks arising from trade protectionism and geopolitical problems in the Korean Peninsula and the Middle East, which could lead to tensions and affect world economic recovery. This year, however, featured a stronger Baht. Q3/2017 saw the average Baht value of 33.37 to the US dollar, 2.7% appreciation from the average of the previous quarter varying with the dollar’s weaker trend projected by investors more or less coinciding with the US Fed’s hiking of interest rates; delays in the implementation of economic stimuli after the US Senate had vetoed the new Health Insurance Bill, which affected the budget supporting such measures. In the meantime, the Baht benefited from inflowing funds resulting from the current account surplus and capital in the form of foreign investors’ debt instruments. The prices of monomers and polymers this year were all healthy, in line with the directions and volatility of feedstock, namely crude oil and naphtha. Here are polymer price comparisons this year versus last year: PP, up 0.72%, averaging $1,151/ton; HDPE, up 0.51%, averaging $1,160/ton; PS, up 3%, averaging $1,393/ton; and ABS, up 4%, averaging $1,819/ton. For monomers, ethylene, up 4%, averaging $1,072/ton; propylene, up 1.46%, averaging $813/ton; and SM, up 2%, averaging $1,241/ton.

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Prices of Feedstock and Petrochemical Products ABS

Oct 17 Nov 17 Dec 17

Sep 17

Aug 17

GPPS

Jul 17

Jun 17

May 17

Apr 17

PP Film

Mar 17

Feb 17

Jan 17

HDPE Film

Nov 16

Oct 16

Sep 16

Aug 16

Jul 16

Jun 16

May 16

Apr 16

Jan 16 Feb 16 Mar 16

Naphtha MOPJ

Dec 16

USD/Ton

Source : ICIS

Growth Outlook

An upbeat projection is in store for the Thai petrochemical industry for 2018, thanks to a more robust GDP and growth of downstream industries. NESDB projected the 2018 GDP at 3.6-4.6%. The key continuing supporting factors from this year are the expanding global economy, the momentum from public investment that shows acceleration trends and progress of key investment projects as well as the rising investment budgets; resilient private investment; continuing healthy trends of key economic sectors; and rising hiring as well as the population income base in the economic regime. Investment in various public projects would speed up demand for polymers, in turn benefiting the petrochemical industry. For 2018, IMF has projected the global economy to grow 3.6% and 3.7% versus its previous projections in April at 3.5% and 3.6%. Accounting for this are the increased economic estimates of the first half-year, when several groups of countries commanded better growth than expected, a proof of continuing global economic recovery (Source: IMF, World Economic Outlook, October 2017).

IMF viewed short-term growth as improved for several regions, particularly the new economies. When compared with previous estimates of April and July, economic growth projections for the leading economies were marked down: Eurozone (2.1% this year to 1.9% for 2018), and Japan (1.5% to 0.7%). By contrast, Asian new economies like China would grow 6.8% to 6.5%; India, 6.7% to 7.4%; and overall, the new economies and developing countries, 4.6% and 4.9%. The world economic growth this year was supported by domestic demand and resilient labor markets, which are expected to roll over into 2018. Yet, the inflation rates of the developed countries will likely remain lower than 2%, although they could inch up in 2018. Nonetheless, IMF shaved its projected US economic growth because of political uncertainty, while the UK remained exposed to Brexit risks. It was projected that the US economy would grow 2.2% this year and 2.3% in 2018. The overriding factor is its political uncertainty, prompting IMF to expect no additional stimuli arising from the tax reform policy. As for the UK economy, the forecast has been trimmed

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Market Overview and Industry Outlook

in line with the growth of the first half of this year, which fell below projection on account of sluggish domestic consumption and the weakening pound. What is more, the medium-term growth of the UK is fraught with high uncertainty due to Brexit impacts on trade obstacles, labor migration, and international financial activities. As far as the global economy is concerned, IMF foresees greater long-term economic risks than short-term ones. In the short term, consumers’ confidence and the more robust business sector may cause the global economy to outdo projections despite the political uncertainty in the US and Brexit fallouts. In the long term, several factors may inhibit the global economy: tighter money supply than expected due to long-term interest rate being hiked in line with market mechanisms amid low headline inflation rates; debt problems in China are projected to rise, causing an economic slowdown in that country; debt-financing and debt payment in the new economies and those countries relying on loans will incur higher cost of funds amid higher overall interest rates. Besides, risks arising from trade protectionism and geopolitical problems in the Korean Peninsula could bring tensions and global economic recovery at any given moment. For Thailand in 2018, the trend appears promising, with growth projections as high as 3.6-4.6%, against 3.9% this year and 3.2% in 2016. The inflation rate should be 0.9-1.9%, with supporting factors from world economic growth and continued exports, causing industrial manufacturing to command clear recovery and do a better job of propping up economic growth. The same with overall investment, which looks to be speeding up in line with private investment. Though private investment this year began leveling off and returning to growth from Q2/2017, the growth seen was still subdued by surplus capacity limitations of the industrial sector, which was quite high during the first half of the year. At any rate, private investment in 2018 will probably pick up fast, supported by rising industrial capacity utilization, which until recently stood at 62%. Notable industries with 65-70% capacity utilization

include electronic bulbs and components. Industries with over 80% capacity utilization include manufacturing of automotive and engine components. Still, positive developments are in line with the business sector’s confidence index, which in September stood at 52.2 (a five-month peak). These included progress in public investment projects, supporting direct and indirect private investment; positive adjustments of economic confidence, supported by domestic atmosphere and domestic political conditions, recovery of the export sector and the overall economy, and the public sector’s measures and policies for driving the economy and constantly growing economic potential. Therefore, one can reasonably project growth in the domestic petrochemical industry in line with global and domestic GDP growth as well as supporting and downstream industries; crude oil price rises; regional trade economy; global economy; and growth in downstream and related industries, namely the plastics industry. The petrochemical industry’s constraints include volatile oil prices, weakening major currencies of trade partner countries, including the euro, the yen, and the yuan, which tends to weaken with China’s economic and monetary policies. Such currency depreciation poses barriers to export growth and puts pressure on recovering prices of merchandise in the world markets.

Strategies for competition Prices

Polymer prices fluctuate considerably with several factors, particularly raw material costs of crude oil, naphtha, and monomers together with demand and supply in markets across the globe. IRPC therefore sets prices with these considerations in mind, referencing them to market situations, and using price intelligence sources from world-class analytical houses like ICIS, Platts, and HIS in conjunction with internal factors including stocks and production costs so as to remain competitive worldwide. The emphasis is on being a low-cost producer thanks to integrated petrochemical business

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customers. What is more, IRPC’s technical service section can advise customers about the choices of polymers before selling them, in addition to mentoring and jointly solving problems with them after sale. IRPC’s concerns about the stewardship of the environment, occupational health, and safety are illustrated by its concrete policy on the stewardship of the environment and safety of employees and communities evident in its certification for ISO 14001 and TIS 18001 for all its polymers. Besides, its ethylene, PE, PP, and PS polymers have earned CSR-DIW (Standard for Corporate Social Responsibility) certificates from the Department of Industrial Works. operations, equipped with production support systems like tank farms and deepsea ports. In short, IRPC holds an advantage on costs, making it competitive even in market doldrums.

Quality

Being Thailand’s petrochemical industrial pioneer with experience in R&D of the needs for goods closely with customers over the years, coupled with the ISO 9001 accomplishment of all its polymers, IRPC commands remarkable capability for boosting customers’ confidence in product quality of international standards. IRPC supplies and develops novel grades of polymers to efficiently meet the needs of customers worldwide. Its polymers are of the natural grade, color compound grade, and composite grade (colored polymers with assorted reinforcing fillers). Thanks to these fine properties, IRPC has been able to meet specific application needs of customers, including parts manufacturing of electrical appliances and automotive parts. To this end, its compounding and composites plants are located near other polymer plants under IRPC Group’s management, thus providing convenience and flexibility for IRPC for taking tailor-made orders from

Product variety

Today, IRPC Group commands some 1 million tons per year of polymer capacity (HDPE, PP, EPS, PS, ABS, and SAN), making it not only convenient but also flexible for product presentation to customers, for certain polymers are interchangeable in certain markets. For instance, HDPE and PP are interchangeable in injection molding for kitchen utensils, woven bags, and woven canvas. In other words, the choice of polymers hinges on factors like properties, price, and market supply. Being a producer with diversity represents wider business opportunities. That is why IRPC and its distributors worldwide can offer a variety of polymer products to cut the average sales prices per unit of marketing efforts.

Sales service strategies

This year IRPC continued to focus on CRM activities for domestic sales agents and traders in Vietnam and Indonesia to constantly promote sales, develop products, and take part in merchandise expositions year-round.

Domestic and overseas sales agent seminars Each quarter, IRPC organizes domestic sales agent seminars, where its executives meet and greet

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Market Overview and Industry Outlook

all sales agents to share knowledge of plastics and petrochemicals and their situations, data of all IRPC polymers, and problems faced in joint business undertakings. That way, both sides can tackle problems head-on, which enables business partners to succeed. In addition, this year’s IRPC seminars for domestic and overseas customers include: • An “IRPC-Marine Treasure Conservation” seminar in Phangnga for customers and traders from 30 countries aimed at providing IRPC’s market intelligence and petrochemical product data before participation in a CSR activity under a project to conserve marine turtles at the Marine Turtle Conservation Center, in that province’s naval base. This activity fostered the confidence in doing business together and cordial relations, and enabled IRPC to thank customers for their consistent trust in its products and services. • An “IRPC Business Forum 2017” under the “Turning the Business Page to Conquer Mission 4.0” theme on September 26, designed to provide a knowledge forum and expand business perspectives from the direct experiences of experts in the public

and private sectors. Business operators would then keep pace with dynamic changes today and be able to modify ideas as their approaches to sustainable businesses. An IRPC product expo was also staged on Pim-L: An acetylene black product and an essential component of lithium batteries, poised for extended development into electric car batteries PP in-line compound: Premium polymers suiting manufacturing of automotive and electrical appliance parts Chlorine-resistant pipe HDPE compound: Polymers designed for manufacturing of high-pressure water pipes that withstand chlorine corrosion and are long-lasting Non-flammable EPS: Designed for construction work, this lightweighted grade commands high insulation properties. Once it catches fire, this sturdy, weather-resistant material will soon self-extinguish. PP spun bond: PP for fiber applications can find diverse uses, including agriculture, baby diapers, sanitary masks, or automotive decoration.

Consumers and traders partcipated in CSR activity under a project to conserve marine turtles at Phang nga.

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2017 Annual Report IRPC Public Company Limited

Nature of customers

Most customers are sales agents, none of whom holds more than 30% of IRPC’s sales revenue. No obligation has been made to sell to any customer more than 30% of IRPC’s future revenue. IRPC therefore is exposed to no risk of reliance on any customer.

Sales and Distribution Channels Domestic sale

Since polymers form the essential basic feedstock of domestic manufacturing of consumer products, IRPC’s focus is on domestic sale. This year it sold 55% equivalent of its revenue to domestic customers or raised sales with domestic customers’ demand to support Thailand’s economic strategies and business operators. IRPC sells through 21 appointed agents that are skillful and ready to provide services, most of whom have engaged in businesses with IRPC for over two decades. IRPC’s integrated petrochemical production of a variety of products enables its agents to save marketing and management expenses, which has contributed to greater security of business relations between IRPC and the agents. Finally, IRPC engages in direct sale to reliable customers, taking into account their readiness and ability to pay.

Export

This year IRPC posted international polymer sales through traders and agents in other countries with long-standing business relations. Its marketing strategies focus on the traditional strengths of product quality and variety, technical services, and mentoring on product development. These agents in turn have close and extensive networks with end-users in major markets with high polymer consumption, including China, Indonesia, Turkey, Vietnam, and Australia. Also, IRPC grew its export markets to regions like Africa, Europe, the US, the Middle East, and Australia. Today, IRPC products are sold to over 100 countries.

3 Market and Competition for Power and Public Utility Businesses IRPC formed business alliance with IRPC Clean Power Co., Ltd., which can support and enhance its power systems by 54 MW and steam by 170 tons per hour. As a result, it commands security and potential, apart from efficiently meeting higher demand.

4 Market and Competition for Port and Tank Businesses

This year the port and tank services posted over Baht 734 million in revenue, a Baht 42-million (6%) drop from last year. Of this, the port business and the tank business share 50% each. The drop in revenue arose from IRPC’s annual turnaround of about 45 days. Port services saw some 17 million tons of cargo transfers, comparable to last year. IRPC applied a strategy of customer base expansion and generated additional revenue from its major customers in the bulk & container group, including iron ores, palm shells, coal, granite, sand, fertilizers, and structural items. The volume transferred was about 2 million tons, primarily goods in the iron and steel business. This year saw about 240,000 tons of granite transfer or about 14%. In addition, improvement has been made to the liquid & chemical terminal to accommodate novel products from IRPC’s assorted projects, including UHV, PPE, PPC, and third-party customers. The volume transferred here was about 15 million tons. As for tank services, some 700,000 tons of cargoes were transferred, a 2% gain over last year, due to expanded services for products like ethanol and methanol.

Outlook

Based on NESDB’s projections of the Thai economic outlook for 2018, growth of 3.6-4.6% is to be supported by healthy global economic growth, which supported exports; the apparent accelerated drive of public investment; the positive adjustment of private investment in the real sector, which appears

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Market Overview and Industry Outlook

healthier than last year; and the positive adjustment of hiring and income base of the population. In place is investment in several infrastructural projects, which is a factor supporting economic growth. Such projects have contributed to a higher capacity of the iron and steel industry, the major customer group of the bulk & container terminal, the critical factor supporting greater import and export volumes through IRPC ports. • Bulk & container terminal: For 2018, IRPC plans to expand port services to accommodate the public policy on “Eastern Economic Corridor (EEC)” with a focus on providing offshore services, fabrication, and cargo transfers through its terminals • Liquid & chemical terminal: For 2018, IRPC is committed to developing and expanding its services to accommodate rising capacities, while investigating port business opportunities in Amphoe Chana, Songkhla, of the South. As for tank service trends, given the domestic economic growth forecast in 2018 and the chemical

group growth foreseen, this spells opportunities for the service to attract new service users or tank service for new products, or both. An instance is the crude oil tank service for Thai Oil Plc, with a 600,000-barrel additional volume. Finally, IRPC has examined the feasibility of a chemical tank fabrication project at the Phra Pradaeng Oil Depot.

5 Market and Competition for Asset Management Business

IRPC’s plan is to develop its Eco-Industrial Zone (EIZ) and the Rayong Industrial Estate (Ban Khai) to accommodate the growth of the industrial sector in line with the EEC, an investment supporting strategy. Specifically, IRPC will ready the infrastructure to match target industries. It has incorporated some project areas as part of the EEC to pilot Thailand’s special economic zone development and promote industrial development to leapfrog and connect investment with ASEAN members and other regions of the world.

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2017 Annual Report IRPC Public Company Limited

Nature of business operation IRPC and its subsidiaries have recognized revenues from selling various products, consisting of revenues from petroleum products which is equivalent to 68 percent of revenues from net sales. IRPC’s major products comprise of diesel, benzyne, fuel oil, basic lubricant and asphalt. Revenue proportion of petrochemical products is estimated at 30 percent of its major revenues; namely, olefins, aromatics, various types of polymer or polypropylene. Besides, IRCP’s revenues are also derived from other businesses, with an approximate of 2 percent from electricity and public utilities. In 2017, IRPC recognized net revenues from sales at 197,594 million baht. Details are as follows:

Operator/ IRPC equity

Business

1. Petroleum

IRPC, IRPC Oil (99.99%)

2. Petrochemical

IRPC, Thai ABS (99.99%) IRPC Polyol (79.99%)(1)

3. Others (2)

IRPC

Total net sales revenue Share of profit (loss) from investment in associates and joint ventures Domestic: export sales revenue

Note: (1) (2)

2017

2016

2015

Baht Mil.

Ratio

Baht Mil.

Ratio

Baht Mil.

Ratio

143,295

72%

113,152

67%

135,125

68%

53,111

27%

52,115

31%

59,728

30%

3,189

3,082

2,741

199,595

100%

168,349

100%

197,594

100%

(184)

125

388

61% : 39%

58% : 42%

57% : 43%

IRPC’s Board approved the selling of investment funds to IRPC Polyol Company Limited with an increase of 25 percent to PCC Rokita SA, Poland on December 20, 2017. After the selling of investment funds is completed will enable the ratio of shareholding of 50:50. Other business consists of revenues from electricity and public utilities.

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Connected Transactions

Connected Transactions For Fiscal Year 2017, IRPC engaged in connected transactions with related companies or parties, either as major shareholders or having common directors, or both. These transactions were based on market prices or, in the absence of market prices, the prices as agreed in the agreements at reasonable prices and fair conditions. The relationship and connected transactions are described below: Connected Party/ Relationship

Transaction

2017

2016

Nature and Condition

PTT Plc (PTT) Relationship: IRPCâ&#x20AC;&#x2122;s major shareholder with 38.51% interest Common director: Mr. Tevin Vongvanich PTT Management on IRPC Board: Mr. Chansin Treenuchagron Mr. Kris Imsang Mr. Sukrit Surabotsopon

- Sale of goods - Purchase of goods - Other revenue

- Account receivable - Account payable - Other receivable - Other payable

1,477 22,675 -

- IRPC paid short-term interest (ICBL) to PTT. No outstanding payment at year-end 1,175 16,653 1 2

PTT Global Chemical Plc (PTTGC) Relationship: 48.89% of shares held by PTT

- Sale of goods - Purchase of goods - Other revenue - Sales & administrative expenses - Account receivable - Account payable - Other receivable

13,850 19,547 7 -

9,591 13,317 1

1,303 1,911 2

1,397 1,481 -

- Sales & administrative expenses - Interest payable

Thai Oil Plc (TOP) - Sale of goods Relationship: - Revenue from 49.10% of shares held by PTT dividends - Account receivable - Account payable Thai Lube Base Plc (TLB) Relationship: 99.99% of shares held by TOP

21,495 130,474 7 39 22

94 70 8 -

- Sale of goods - Purchase of goods - Account receivable

327 20 -

Thai Paraxylene Co., Ltd. (TPX) - Purchase of goods Relationship: - Account payable 99.99% of shares held by TOP

1,178 134

Thaioil Marine Co., Ltd. (TOM) - Service revenue Relationship: - Account receivable 99.99% of shares held by TOP

17 3

TOP Solvent Co., Ltd. (TS) Relationship: 99.99% of shares held by Thaioil Solvent Co., Ltd.

- Sale of goods - Purchase of goods - Account receivable - Account payable

1,259 81 116 8

TOP Solvent (Vietnam) Co., Ltd. - Sale of goods Relationship: - Account receivable 99.99% of shares held by TOP Solvent Co., Ltd.

446 22

18,100 IRPC sold petroleum products to PTT 108,594 IRPC bought crude oil and natural gas from PTT 8 IRPC received transport compensation and per sonnel wages from PTT 43 Personnel expenses paid to PTT

IRPC sold petroleum products to PTTGC IRPC bought petroleum products from PTTGC IRPC provided research services to PTTGC Personnel expenses paid to PTTGC

95 IRPC provided tank storage service to TOP 56 IRPC received dividends from TOP shares 8 2 280 IRPC sold aromatics to TLB 4 IRPC bought asphalt product and lube base oil 37 from TLB 824 IRPC bought aromatics from TPX 21 14 IRPC provided port services to TOM 2 1,217 IRPC sold aromatics to TS 82 IRPC bought solvents from TS 100 8 735 IRPC sold aromatics to TOP Solvent (Vietnam) 40

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2017 Annual Report IRPC Public Company Limited

Connected Party/ Relationship

Transaction

2017

2016

Sak Chaisidhi Co., Ltd. (SAKC) - Sale of goods Relationship: - Account receivable 80.52% of shares held by TS

314 10

PTT Energy Solutions Co., Ltd. - Sales & administrative (PTTES) expenses Relationship: - Other payable 40.00% of shares held by PTT 20.00% of shares held by IRPC Common director: Mr. Sukrit Surabotsopon

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Nature and Condition

251 8

IRPC sold aromatics to SAKC

139 IRPC paid for technical services to PTTES

- IRPC provided training services to PTTEP

Energy Complex Co., Ltd. - Sales & administrative (EnCo) expenses Relationship: - Other payable 50.00% of shares held by PTT Common director: Mr. Kris Imsang

94 IRPC rented offices and facilities from EnCo

PTT International Trading Pte. - Sale of goods Ltd. (PTTT) Relationship: - Purchase of goods 99.99% of shares held by PTT - Sales & administrative expenses - Expenses from oil futures contracts - Account receivable - Other payable

285

PTT Exploration and - Other receivable Production Plc. (PTTEP) Relationship: 65.29% of shares held by PTT Common director: Mr. Tevin Vongvanich

PTT Tank Terminal Co., Ltd. - Other revenue (PTTTANK) - Other receivable Relationship: 99.99% of shares held by PTT

4 1

Business Services Alliance - Other revenue Co., Ltd. (BSA) Relationship: - Sales & administrative 25.00% of shares held by PTT expenses - Other payable

3 266

513 IRPC paid premiums for building, health and accident insurance to TIP

3 1

IRPC received personnel wages from PTTTANK

3 IRPC Oil earned revenue for store administrative services from BSA 229 IRPC paid personnel wages to BSA

Sport Services Alliance Co., - Sales & administrative Ltd. (SSA) expenses Relationship: 99.99% of shares held by BSA IRPC Management on Board: Mr. Phothiwat Paopongchuang

5 IRPC funded publicity for the PTT Rayong soccer team for SSA

PTT Polymer Logistics Co., - Sales & administrative Ltd. (PTTPL) expenses Relationship: 99.99% of shares held by PTTGC.

2 IRPC paid transport fees to PTTPL

141

Connected Transactions

Connected Party/ Relationship

Transaction

2017

2016

Nature and Condition

PTT Polymer Marketing Co., - Sale of goods Ltd. (PTTPM) - Purchase of goods Relationship: - Account receivable 99.99% of shares held - Account payable by PTTGC.

124 594 8 40

161 IRPC sold polymers to PTTPM 623 IRPC bought polymers from PTTPM 8 53

Polymer Marketing DMCC (PMDMCC) Relationship: 99.99% of shares held by PTTPM

- Sale of goods - Account receivable

104 -

20 IRPC sold polymers to PMDMCC 10

PTT Asahi Chemicals Co., Ltd. - Purchase of goods (PTTAC) - Account payable Relationship: 50.00% of shares held by PTTGC.

1,693 198

HMC Polymers (HMC) Relationship: 41.44% of shares held by PTTGC.

- Other revenue

PTT Digital Solution Co., Ltd. (PTT DIGITAL)* Relationship: 40.00% of shares held by PTTGC 20.00% of shares held by PTT Common director: Mr. Chansin

- Other revenue - Sales & administrative expenses - Other payable

32 26

Thai Styrenics Co., Ltd. (TSCL) - Sale of goods Relationship: - Account receivable 99.99% of shares held by PTTGC

2 -

TOC Glycol Co., Ltd. (TOCGC) - Purchase of goods Relationship: 99.99% of shares held - Account payable by PTTGC

40 11

1,158 IRPC bought acrylonitrile (AN) from PTTAC 122

1 IRPC provided training services to HMC

1 IRPC earned revenue from program 35 development for PTT DIGITAL 2 IRPC paid for IT services to PTT DIGITAL

198 IRPC sold aromatics to TSCL 24 34 IRPC Polyol bought petrochemicals from TOCGC 10

NPC Safety and Environmental - Sales & administrative Service Co., Ltd. (NPC S&E) expenses Relationship: 99.99% of shares held by PTTGC

2 IRPC paid for safety equipment rent to NPC S&E

PTT Maintenance and - Sales & administrative Engineering Co., Ltd. (PTTME) expenses Relationship: - Other payable 99.99% of shares held by PTTGC

8 IRPC paid engineering design fees to PTTME

Global Green Chemicals Plc - Purchase of goods (GGC) - Account payable Relationship: 72.29% of shares held by PTTGC

5 -

10 317 IRPC bought petroleum products from GGC 13

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2017 Annual Report IRPC Public Company Limited

Connected Party/ Relationship IRPC Clean Power Co., Ltd. (IRPC-CP) Relationship: 51.00% of shares held by GPSC 48.99% of shares held by IRPC IRPC Management on Board: Mr. Pongpraphan Titathavewatana Ms. Ratchadaporn Rajchataewindra Mr. Sirimet Leepagorn

Transaction

2017

- Sale of goods and services - Purchase of goods - Other revenue

69 1,660 6

- Account receivable - Account payable - Other payable

10 103 197

2016

Nature and Condition

76 IRPC sold power and steam and provided engineering services to IRPC-CP 2,055 IRPC bought power and steam from IRPC-CP 4 IRPC received central (common) services charges from IRPC-CP 28 250 184

Note: ICT Solution Co., Ltd., renamed as PTT Digital Solution Co., Ltd. (PTT DIGITAL) on June 22, 2017.

Connected Transactions Policy and Requirements

Since IRPC and its subsidiaries operate fully integrated refining and petrochemical businesses, similar to the operations of PTT Group companies, connected transactions between IRPC and PTT affiliates are inevitable and therefore regarded as normal business operations. These transactions included buying and selling of oil products and related services, as well as other normal businesssupporting transactions, which were executed on an arm’s length basis with the same pricing and conditions as those executed with a third party and without transfer of benefits between the concerned parties. IRPC has made prudent, reasonable and independent consideration of these connected transactions in its best interests.

Connected Transaction Measures

IRPC complied with SEC’s and SET’s requirements concerning connected transactions. The Board has prudently considered the transactions with possible conflicts of interests to ensure that they were executed in a fair, transparent and reasonable manner. Any directors, employees or related parties with potential conflicts of interest must leave the meeting and must not vote on the agenda item in question.

Moreover, each quarter the Audit Committee reviews IRPC’s and its subsidiaries’ connected transactions with related companies or parties to avoid conflicts of interest and ensure maximum benefits to IRPC.

Policy on Future Connected Transactions

IRPC’s future connected transactions will be conducted in the normal course of business in adherence to suitable conditions and fair market prices. The practice is meant to ensure the best interests of all shareholders and stakeholders, while ensuring strict conformity to the corporate governance policy as well as SEC’s and SET’s regulations concerning connected transactions.

Opinion of the Audit Committee

Having reviewed all connected transactions, the Audit Committee regards these connected transactions as sensible and conducted in the normal course of business, based on suitable reference market prices, with the same pricing and conditions as those executed with a third party, and in conformity to the corporate governance policy, as well as SEC’s and SET’s regulatory requirements.

MANAGEMENT ANALYSIS MESSAGE FROM THE PRESIDENT PERFORMANCE SUMMARY EVEREST HUMAN RESOURCE MANAGEMENT AND DEVELOPMENT 2016 RESEARCH & DEVELOPMENT FOR EXCELLENCE MANAGEMENT DISCUSSION AND ANALYSIS

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2017 Annual Report IRPC Public Company Limited

Message from the President

Dear Shareholders, The year 2017 marked another success for IRPC in achieving its established goals to gain profits not less than the previous year regardless of the Major Turnaround of overall IRPCâ&#x20AC;&#x2122;s facilities during the first two months of the first quarter. The success of such project is illustrated below. Upstream Project for Hygiene and Value-Added Products or UHV which could operate commercially throughout the year for the first time. Although the

ability to create added value has not completely fulfilled owing to the downfall of propylene, considered as a major component, coupled with the production capacity that is lower than expected, IRPC solved this problem through continuous projects such as catalyst reformulation, mix gasoline project including catalyst cooler project in which this continuous project will enhance the efficiency of UHV to create added value of at least 1 US dollar per barrel.

145

Message from the President

Fully Integrated Polypropolylene Project (PPE/ PPC) of polypropolylene to increase production capacity of PPE/PPC to 300,000 tons per year will be completed at the end of this year and can create added value of approximately 0.8 US dollars per barrel, including IRPC clean power project to produce 240 mw electricity in which IRPC had invented with Global Power Synergy Public Company Limited (GPSC) and will be completed at the end of this year as well. The EVEREST project, one of the important strategies of IRPC to create added value by applying best practices from world-class consultant with every sector of IRPC’s operation which encompasses Production, Commercial, Procurement including other supporting units throughout the organization and can foster added value of 7,000 million baht within this year and expect to achieve its objective of 10 billion baht within 2018.

As for 2018 operation plan, IRPC has specified the business plan to support the organization’s growth in the future by adhering to the Best Practice from the Everest Project which incurred the total revenues of 7,218 million baht.

All of the above projects will support IRPC to definitely achieve its outstanding performance in 2018. IRPC defines its objectives of consistently creating more revenues until it reach the Top Quartile level of petrochemical industry to achieve its mission of “the Leading Integrated Petrochemical Complex in Asia by 2020”. Such objective is considered a challenging task and requires cooperation of the entire organization to move forward every project to its ultimate success. Apart from its business management on the foundation of good corporate governance, IRPC strives to develop human resource management system to become “HR Excellence” coupled with an instill of New IRPC DNA to increase its efficiency while emphasizing on corporate ownership notion, achieving outcomes, maintaining promises, constantly developing, working cooperatively and offensively solving problems that will ultimately drive the organization toward its success and sustainability.

For 2018 operation plan, IRPC has defined a new strategy under the name “GDP: Power of Growth, Power of Digital and Power of People by establishing the “Office of the Strategic Management and Administration” as an ad hoc unit to move forward key organization’s strategies to success as the Everest Project, one of the major projects under GDP strategic plan, consisting of the EVEREST Forever (E4E), an investment project on the construction of paraxylene with approximate production capacity of 1 million tons per year or equivalent to an investment of 1 billion US dollars. In addition, IRPC 4.0 had been implemented by applying digital system and state-ofthe-art innovation with every step of business operation as well as the project to select and develop new leaders to continue missions in driving the organization in the future. These projects help elevate the level of competitiveness of the organization. Nonetheless, our stride toward IRPC’s vision by 2020 would be unsustainable unless IRPC strived for nonmonetary returns as well. For instance, it is imperative that IRPC make itself conscientious, ethical, responsible for society, communities, and the environment, and respect human rights, for these are the cornerstones of sustainable success. It was therefore encouraging to see IRPC earn a fourth consecutive year of DJSI (Dow Jones Sustainability Indices) membership in the Oil & Gas Refining and Marketing group; an SET Sustainability Award; and an NACC Integrity Award presented by the Office of the National Anti-Corruption Commission for second year. These three accolades speak volumes for IRPC’s sustainable growth-our collective pride. I would like to take this opportunity to express my sincere gratitude to every shareholder, the Board, customers, business partners, financial institutions, community, employee and every related person who consistently support and have faith in our business operation. With every factor encouraging IRPC’s sustainable growth and development, I am definitely confident that we can move the company toward the goal of “Getting to the Top and Staying There”.

Mr. Sukrit Surabotsopon President

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2017 Annual Report IRPC Public Company Limited

Performance Summary A “Leading Integrated Petrochemical Complex in Asia by 2020” vision was proclaimed by IRPC, designed to constantly improve its production efficiency with stability and to manage its supply chains while engaging in production planning for maximum efficiency. All the while, IRPC recognizes the primary need for safety, occupation health, society, communities, and the environment around its sites so as to prepare to internationalize its operations in goods and services to accommodate future market needs.

This year IRPC was committed to executing the EVEREST Project, continuing from last year, with two critical goals: profit increase of some US$ 300 million (Baht 10.5 billion) a year and development of the organization health toward the top quartile. Thanks to efficient management practices in driving this project together with all employees’ commitment, the project achieved its challenging goals. To enable IRPC to continue to grow, the management has defined GDP strategic directions and execution (Power of Growth, Power of Digital, and Power of People) to set goals for profits, business growth, corporate excellence, and IRPC upgrading to world-class in parallel with the cultivation of the IRPC DNA and i-SPIRIT values, designed to enhance employees’ capability and awareness of this company to which they belong so that they all can jointly grow it toward sustainability. The key is to strike a balance between the economic, social, and environmental aspects while exerting corporate governance and risk management to lead to sustainable corporate governance. Here are the performance highlights for the year.

1. Economic

Focusing on strengthening its core business, IRPC adapts its strategies to engage in business and make profits amid increasingly fierce business competition stemming from external factors concerning the crude price, which surged from last year and hovered at a high level, thanks to the output curb agreement between OPEC and non-OPEC producers, the weakening US dollar, and the US crude oil inventory. All these factors contributed to an average Dubai price of US$ 53 a barrel this year. The global GDP, meanwhile, expanded by 3% (World Bank, January 2018), driven by key factors, namely private consumption buoyed by the fully recovering labor market in several regions, recovering world trade boosting exports’ role in enhancing growth in exporting countries, and, finally support from the fiscal policy push. Leading economies like the US, EU, and China are bound to grow further. The US economic growth is supported primarily by private consumption and

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investment, but offset by political issues and precarious government stability due to President Trump’s policies. The EU’s economic growth, on the other hand, looks very promising as political concerns subsided. Anyway, risks still remain in Brexit negotiations, which will ripple through trade and investment terms in the UK and the EU. China’s economy is bound for healthy growth despite negative investment trends. As for Thailand, the year’s GDP of 3.9% is the Bank of Thailand’s projection (January 2018), a 0.7% gain from the previous forecast, thanks to better exports than forecast, led by agricultural produce, food and drinks, and electronic parts. Meanwhile, private consumption grew, evident in the number of cars sold an indication of expenditure of medium-income to high-income population, and public consumption grew because of economic stimuli via the government’s measures to help those with low income and measures to stimulate investment in provincial areas. That said, the appreciating Baht depressed the income of farmers and exporters, while subduing the domestic purchasing power of households of the middle-income to low-income group, which were still feeble.

As for private investment, recovery was slow, with the public sector’s investment in response to future investment through infrastructural projects, transport, and EEC (Eastern Economic Corridor Project). In all, the tourism sector and the service sector continued to drive the country’s fundamental economy, which seemed to be on a rise. Below are the highlights of IRPC’s economic performance this year.

1.1 Production operations

For competitiveness, IRPC’s goal is for operational excellence and relentless production efficiency with stability. Add to these elements efficient energy-related production cost management and production planning that meets market needs through flexibility, and due regard for safety and occupational health, society, communities, and the environment around IRPC Industrial Zone, together with relentless cultivation of the safety culture, a crucial operating factor for the workforce. Below are the highlights of production operations. 1.1.1 Process improvement and machinery efficiency improvement of the group of plants, totaling

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167 projects, including the Reliability Improvement DCC Flue Gas Cooler Project, UHV Gasoline Mode Operation Project, and Ethylene Purification Unit Project to give process control precision and accuracy, yielding products of desirable qualities and quantities while lowering process energy. Finally, a Fire Protection System Project was designed to monitor safe operation and enhance confidence in plant stability and safety. 1.1.2 Process stability improvement: IRPC underwent the annual major turnaround to ensure that its production is reliable and prepared, which resulted in production as planned and prevention of impacts from unplanned shutdowns. This turnaround achieved all its planned goals for 2017. The continuing subset projects included the Inspection Roadmap and the Plant Health Check Projects to inspect the strength of assorted machinery and measurement tools. Also, the application of the Integrated Database Management System (IdMS) helped analyze all incidents and monitored operation to prevent recurrence. This year’s plant reliability posted 99.4% performance against the goal of 99.5%. 1.1.3 Energy management: IRPC’s ability to systematically manage energy was demonstrated through a project to raise energy efficiency. Specifically, more natural gas was consumed in place of fuel oil in processes, and a management software was applied to improve internal processes for higher process efficiency. Also, by efficiently controlling and monitoring outcomes, IRPC successfully controlled hydrocarbon compound losses from processes, thus cutting pollutant emissions. As evidence, the energy intensity index (EII) met the goal at 90.4%, equivalent to energy reduction of 1.9 million gigajoules, or Baht 749 million.

1.1.4 QSHE management: IRPC is committed to business operational excellence and sustainable growth under its Operational Excellence system.

1.2 Key strategic project operation for

business growth

IRPC’s growth goal is to attain world-class security for business leadership with 14% ROIC (return on invested capital) by 2020. Therefore it defined directions and strategies under the GDP plan involving three sources of energy, detailed below.

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Power of Growth IRPC’s approach for extending its investment scope for relentless growth is to focus on raising the productivity of green petrochemicals, market expansion to ASEAN, cooperation with business partners for incremental interests, and development of high-value products with innovation excellence, including the Paraxylene Project, which carved investment opportunities for value addition to existing products so as to come up with new products of high market interest. To this end, heavy naphtha is transported from the refinery’s UHV for use as a process raw material with competitive production costs. This year the project is under the technology selection stage and is due for completion in the first quarter of 2018.

Power of Digital IRPC’s approach for digitalization and application of advanced technology is meant to streamline operation, upgrade operating processes, enhance plant efficiency, and digitize the entire customer services known as the IRPC 4.0 Project. The project is under investigation with the consultant, and a master plan is due for completion in the first quarter of 2018.

Power of People IRPC’s approach for human resource management entails a suitable corporate structure for flexible administration, cultivation of a corporate culture to grow employees’ capability, selection of proper personnel, inspire people to work, and develop leadership to galvanize these into a new corporate culture in line with IRPC’s growth.

Below are the highlights of key strategic projects this year.

1.2.1 EVEREST Project

To forge incremental profits from enterprise business operations and strengthen the organization health, this project saw cooperation with a world-class consultant company in advocating and driving IRPC’s approaches to raise operating efficiency to ensure that IRPC can sustainably maintain profitability. The project embraces operations, integrated supply chain, commercial, procurement, and corporate areas. This year IRPC reaped Baht 7.218 billion in benefit, as detailed below. Operations area Operations area, focusing on raising efficiency and process stability, contributed to Baht 3.011 billion against the goal of Baht 2.751 billion, consisting of: 1. Unit operation and energy improvement through a focus on process efficiency improvement, energy consumption reduction or switching to lower-cost energy forms together with process loss reduction to enable reuse in parallel with model plant operation to change employees’ attitudes and behavior and efficient teamwork management 2. Maintenance and reliability improvement by lowering risks of unplanned shutdowns and proceeding with process improvement to ensure planned execution. This year’s availability was about 96.99%, comparable to the 97% goal, and the number of plants without unplanned rose to 12 as opposed to 10 last year.

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Integrated supply chain

Integrated supply chain through improving process planning tools for higher efficiency and precision of outcome analysis, together with the application of new tools accepted by leading companies, including Advanced Optimized PIMS (PIMS-AO), P-PIMS, ORION, and Multi-Blending Optimization (MBO) for crude oil purchase planning as needed by IRPC, which successfully produced Baht 2.077 billion in EBIT against the Baht 1.921-billion goal. Commercial area Commercial area, focusing on raising commercial operating efficiency and raising incremental profits from routine operation, development for higher team capability with a commitment to pursuing ways to make profits through brainstorming for new projects while nurturing ownership awareness and enhancing problem-solving skills. Teams were to be coordinated to achieve goals. This year a total of Baht 1.179 billion in EBIT was realized as opposed to the Baht 1.348 billion.

Procurement area

Procurement area, focusing on the management of material procurement and strategic services and on enhancing purchasing teams’ caliber to adopt strategic attitudes and operating efficiency by leveraging new tools to add bargaining power with explicit regard for ethics, transparency, and fairness in business dealings. This year’s successful Baht 411 million in EBIT against the goal of Baht 353 million together with the adoption of new international-standard tools, including e-Auction, e-Catalog, and e-Buyer to upgrade its practices to digital procurement helped cut our procurement costs of goods and services.

HR area

HR area, focusing on the management of human resources for maximum efficiency, encouragement of their maximum showcasing of their capability and responsibility, hiring freeze, mutual separation plans (MSPs), and efficient outsourcing. This year, as a result, IRPC achieved Baht 217 million in EBIT as opposed to the goal of Baht 813 million.

Corporate area Corporate area, with a focus on functional excellence across the board, a fundamental for developing cross-functional Group excellence, including the improvement of expenses for IT equipment gear, reduction of financial expenses and administration expenses, and budget management. This year IRPC successfully achieved Baht 323 million in EBIT as opposed to the goal of Baht 330 million. In addition, the EVEREST Project featured organization health operation to enable IRPC to sustainably maintain competitiveness. This year the organization health index (OHI) stood at 78, an improvement over last year’s score of 70.

1.2.2 UHV (Upstream Project for Hygiene and Value-Added Products)

This project seeks to raise competitiveness and foster sustainable growth to improve the quality of low-value heavy oil and add value to it. Key products consist of propylene and heavy naphtha. Secondary ones consist of ethylene, butane, propane, LCO, light naphtha, hydrogen, sulfur, fuel gas, and CLO. The project is currently running full-steam ahead, using PP as a raw material for the Fully Integrated Polypropylene Project and the Polypropylene Compound Project. To accommodate prevailing circumstances, IRPC extended work on UHV as described below. • The Maximum Gasoline Project: This undertaking raised the gasoline capacity from 95 million to 120 million liters a month, in turn raising IRPC’s market share and income by about Baht 870 million a year. Construction work began in November last year and ended in October this year. After testing in July, commercial operation began in November this year. • The RDCC Catalyst Reformulation Project: This project raised propylene output from 18% to 21%. It will start making up new catalysts to replace old ones from this year-end to the middle of 2018. • The UHV Catalyst Cooler Project: This project aimed to grow production capability by using heavy oil as a raw material while doing away

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with temperature constraints in the catalyst regenerator. An engineering design company is being selected, machinery is being procured, and EPC construction for ISBL and OSBL was completed. The project is now in the detailed engineering design stage.

1.2.3 Fully Integrated Polypropylene Project

This project seeks to improve and expand PP capacity to 300 KTA at a budget of US$ 236 million to strengthen IRPC’s core business with a total capacity of 775 KTA. At the same time, it hiked competitiveness by improving product quality to meet the needs of current customers while accommodating the growth of domestic and AEC markets, particularly high-growth industries, namely automotive, electric appliances, and food containers. Two mini-projects make up this project: • PPE (PP Expansion Project): Investment will be made to install additional machinery to grow capacity by 160 KTA from the current capacity of 475 KTA to a total of 635 KTA Construction work began in May 2013 and ended in August this year. After testing, it went commercial in September this year. • PPC (PP Compounding Project): High-efficiency “In-line Compounding” technology is used here for the 140-KTA operation. The propylene compound licensor and producer commands the top market share in Japan, supplying products to leading automobile companies like Toyota, Mitsubishi, Honda, and Nissan. Thanks to this process, production was streamlined in response to auto-makers’ strategies for cost reduction each year. Project construction began in May 2013 and ended in October this year. Testing began in November this year and the project went commercial in December 2017.

1.3 Business operation

An IRPC goal is to grow its profits by requiring EBITDA growth of 10%. This year its EBITDA amounted to Baht 20.42 billion, against Baht 17.43 billion last year, some Baht 2.99 billion (17%) up. The net profit came to Baht 11.354 billion, against Baht 9.721 billion last year, a gain of Baht 1.633 billion (17%) from its suite of efficiency improvement projects. Below are the highlights of key business moves made this year. Petroleum business IRPC strives to keep domestic customers while growing its petroleum product exports to Indochinese countries with high demand. This year the business grossed Baht 135.125 billion in sales revenue. EBITDA came to Baht 7.51 billion, a 55% gain over last year’s EBITDA of Baht 4.844 billion. Below are strategic implementation highlights.

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Other support businesses

Petrochemical business To profit through incremental spreads, IRPC focuses on relentlessly promoting and supporting R&D to develop special-grade products, deciding the sales proportions of these products at 60% by 2020. This year the petrochemical business generated Baht 59.728 billion in sales revenue, of which domestic sales accounted for 57%; exports, 43%. IRPC’s EBITDA totaled Baht 11.028 billion, a 2% rise from last year’s Baht 10.857 billion.

(a) Power and utilities IRPC’s goal is to provide integrated quality utility services to meet the needs of target industries and fully support businesses with due regard for harmonious co-existence among communities, society, and the environment. Its businesses consist of services for power, steam, public utilities, and others, including water and air systems, and wastewater systems. This year saw Baht 2.754 billion made in revenue. (b) Port and tank farm IRPC’s goal is to relentlessly improve the quality of its product tanks and port services to meet customers’ diverse needs with a focus on advanced, international-standard, and safe management systems. This year the business generated Baht 734 million, down Baht 42 million (6%) from last year. The port business and the tank farm businesses generated about the same income. The lower income this year was due to a lower throughput accompanying the annual maintenance turnaround. (c) Asset management This year it generated Baht 48 million in land sale, land lease, and the zone’s central utility fees of about Baht 33 million.

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1.4 Research and development operations Gearing toward R&D Excellence, IRPC is fully committed to relentlessly expanding research and development (R&D) products aiming to strengthen its position to grow its business sustainably by consistently increasing its competitiveness to retain and grow its market share. Its strategy includes horizontal and vertical integration by extending its businesses to adjacent opportunities, creating more value-added products, and generating a New S-Curve by continuously searching for new long-term business development. This demands fully integrated management that can be effectively modified to fit the corporate culture together with a clearly defined master plan, execution plan, and continuous advancement of its competitiveness via R&D comparable to leading global corporations. To achieve business sustainability, it is therefore essential to strongly support R&D capital investment for tangible returns which are value-added.

The highlights of key R&D operations are as follows:

1.4.1 Develop and install a Transformation Office mechanism, which is a new management process towards R&D excellence aiming for ensuring achievement of planned and budgeted research projects. The process is designed with systematic operating procedures and tracking mechanisms. The process was developed from the Everest Project best practice, including the use of digital control and close monitoring. 1.4.2 Modification of the Product Development Committee meeting format and procedures to signify mutual decision-making among all business units involved. The change was necessary to ensure alignment of goals toward new product launch in the market and to jointly, proactively develop solutions to

all problems, intended to maximize efficiency through coordination among all business units and optimize the benefits to IRPC. 1.4.3 Seeking new S-Curve and business opportunities through De novo Research R&D program focusing on researching new and in-line with megatrend technologies such as electronic materials, energy storage and nano-materials. These research efforts are jointly conducted with leading domestic and international academic institutes through an open innovation mechanism, including Vidyasirimedhi Institute of Science and Technology (VISTEC), National Science and Technology Development Agency (NSTDA), Japan Advanced Institute of Science and Technology (JAIST), and Haydale Technologies Thailand.

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1.4.6 Innovative products developed by the R&D team that were commercially launched to markets in response to various customers’ needs and can be applied to multiple functions are as follows:

1.4.4 IRPC seriously encourages researchers to undergo domestic and international training to improve R&D capabilities, including the Scale-Up Team’s long-term training with R&D leaders such as Nippon A&L for ABS product development skills, and to integrate best practices from technology leaders to enhance in-house research. 1.4.5 IRPC pursues innovation investment on the “Production Process of Ultra-High Molecular Polyethylene (UHMWPE) with Novel HA2PO catalyst” Project. UHMWPE is an engineered plastic with properties superior to common polyethylene, including higher endurance to impact forces, tensile forces, erosion and chemical corrosion. UHMWPE is a breakthrough product, as it provides many more opportunities for producing other value-added products.

• Polypropylene for coating and lamination on woven plastic bags to enhance adhesive efficiency on material surfaces and even coating thickness, while coating film remains clear, glossy and tensile-tolerant, known as high speed and excellent bonding adhesion polypropylene for lamination & coating application. The application reduces manufacturing costs with lower polymer shrinkage from molds and increases the manufacturing capacity of the plastic-bag coating process with a higher production speed.

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• Ultra-thin and energy-saving polypropylene for thermoforming application: The development of homopolymer polypropylene that has thinner and even thickness when formed to withstand higher impacts and better forming during the molding process and hence can be recycled, is another commercial IRPC product. The process operates under lower temperature than other common homo-polypropylene, saving costs and energy. • Multilayer surface coating for fast cycle molding (EPS) is another value-added product with additional properties to withstand suddenly high impacts with better force distribution, lifetime durability and ductility, lightweight, lower energy consumption during molding process, and lower chemical uses, thus lowering costs. • High-density polyethylene pipe: IRPC has developed HDPE for piping application that can be used in many services, such as chlorine resistant water pipe under the ASTM F2023 standard, and is resistant to high impacts under the ISO 13479 standard, as well as low sagging property and higher viscosity when molded with low shear forces, but constant viscosity when molded with normal shear forces under the ISO 4427 standard.

1.5 Information Technology Operations Under a clear policy to continuously develop and upgrade information technology, IRPC consistently improves the IT infrastructure and network efficiency to support IT operation expansion aiming to achieve international standard management systems, advanced cybersecurity systems, and optimize IT operations. IRPC developed and installed the Governance Risk and Compliance (GRC) system in 2017 to track and control its operations’ compliance with IRPC’s policies, rules and regulations. This Continuous Control Monitoring System significantly helps track and correct anomalies from “Procure to Pay” and from “Order to Cash”. This proactive approach helps

ensure maximum internal control efficiency and effectiveness. The introduction of SAP Treasury Risk Management and Cash & Liquidity Management greatly helped increase the efficiency of financial management, real-time liquidity management, deposit management, short-term management in the money market, foreignexchange management, securities investment management, cash holdings analysis, financial deal agreement, and investment risk management. The system considerably improves the accuracy and resiliency of IRPC’s financial operations. Moreover, IRPC has developed and put in place the IT infrastructure cybersecurity certified by the ISO/ IEC 27001:2013 (Information Security Management System), bolstering full confidence in its IT system among all executives, employees and business partners.

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1.6 Financial Operations

To efficiently manage liquidity to sufficiently support its operations and capital projects, IRPC has appropriately managed its financial position and adequately, routinely disclosed all financial data to market analysts, investors and financial institutions. Key financial operations are highlighted below. 1.6.1 Fitch Ratings (Thailand) maintained the Company’s financial credibility at A-(tha) and adjusted the credibility level from ‘negative outlook’ to ‘stable outlook’. 1.6.2 Secured short-term loans: • Renewed the loan agreement with PTT Plc. to efficiently manage financial liquidity among PTT Group with loan facilities of Baht 10 billion and credit line of Baht 1.5 billion. • Renewed a short-term Baht loan agreement with domestic financial institutions for a Baht 5-billion coverage. • Renewed the committed-line loans for domestic letters of credit (DLCs) covering Baht 12 billion with domestic financial institutions for extended terms of payment for crude oil procurement with PTT to 60 days. 1.6.3 Activities for shareholders and investors, and securities analysts: • Regular meetings with domestic and international shareholders and investors, stock analysts and fund managers to provide data, directions and policies, as well as business performance. In 2017, IRPC organized four quarterly analyst meetings, four audio conferences with domestic stock analysts on quarterly performances, 15 roadshows for domestic and international investors, and 31 company visits where IRPC executives met face-to-face with groups of investors and analysts. • Joint organization with SET annual activities to promote disclosure of company data in the “SET in the City 2017” and quarterly “Opportunity Day” events. • Organization of “Analyst Site Visit 2017” for stock analysts to visit UHV Project, PPE & PPC

Project, and IRPC Clean Power for better understanding of the business and observe major investment projects. • Organization of two “Knowledge Sharing (KM)” seminars for stock analysts and representatives of financial institutions to enhance their analyses on company fundamentals and business performance, which directly impact stock prices under the themes of “2017 Petrochemical Market Outlook” and “Petrochemical: Moving Forward to the Future”. • Arrangement of a visit by EDL-Generation Public Company’s executives and staff to learn and understand investor relations work. EDL-Generation Public Company is a listed company on the Lao Securities Exchange (LSX). • Making a presentation at the “IR Presentation Skills Workshop” under the Certificate in Investor Relations 2017 program. The program is jointly organized by the Thai Listed Companies Association (TLCA), Thai Investor Relations Club (TIRC) and CFA Society Thailand. 1.6.4 Achievement awards in 2017: (Details in Awards and Acheivements in page 14). BEST INVESTOR RELATIONS COMPANY ASIA’S BEST CEO (INVESTOR RELATIONS) ASIA’S BEST CFO (INVESTOR RELATIONS) FROM CORPORATE GOVERNANCE ASIA

BEST INVESTOR RELATIONS AWARDS BEST INNOVATION COMPANY AWARDS FROM SET AWARDS 2017

THE BEST FX SOLUTIONS THAILAND FROM THE ASSET TRIPLE A COUNTRY AWARDS 2017

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1.7 Legal Actions

IRPC’s goal is to administer its legal work in adherence to good governance principles and corporate governance practices for sustainable growth. In 2017, it operates for due benefits in the administration of legal work: contracts, business support, and public affairs. This year’s legal highlights appear below: 1.7.1 A Contract Management or “SWAT” Team was set up to support EVEREST’s operation to optimize its procurement contract management and reduce procurement costs by Baht 250 million. The 2017 performance showed a decreased cost of Baht 872.47 million as a result of win-win contract management with business partners. 1.7.2 All permits related to IRPC’s business operations were granted without any objections. 1.7.3 IRPC’s Rayong port received from the Marine Department a Statement of Compliance (SOC) of the Port Facility issued under the International Ship and Port Facility Security Code (ISPS Code) under the Convention for the Safety of Life at Sea. The statement certified that the port had been operated in compliance with the approved port facility security plan, a result of IRPC’s improved safety measures of the port in the cargo loading/ unloading and services of up to international standard. 1.7.4 Community complaints related to public paths and waterways in IRPC’s operating areas under Articles 8 and 9 of the Land Code Act were always attended to with care. Facts and all work process executed were presented to related government

agencies, local and regional, as well as to the press and SET so that interested stakeholders and shareholders may be informed. It also showed IRPC’s commitment to solving problems in a transparent manner in compliance with the laws and good corporate governance.

1.8 Human Resources Development

IRPC’s goal is to be a healthy organization with capable, conscientious personnel. It recruits and selects the right people for the right jobs and enhance their competence to drive the business, prepared for prevailing business situations, and cultivates in them IRPC’s DNA and i-SPIRIT values to enhance their capability and feeling of ownership as a foundation to sustainable success. Below are the highlights of HR administration this year: 1.8.1 Leadership Development Program with an emphasis on five leadership skills: 1 business success building 2 change management 3 team development 4 self-development, and 5 role model of corporate value. The leadership assessment system was designed through 180-degree assessment, which can track each individual development to be analyzed and used as database for practical development. 1.8.2 Development of a performance management system to value each employee’s

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contribution to IRPC’s success, both in monetary and non-monetary forms, such as stakeholders’ satisfaction, work system development and efficient knowledge management, all of which has led to efficient performance management and overall corporate success. This also motivated employees to better their performance in the short term and long term. 1.8.3 Cultivation of corporate values by setting practical patterns for employees in keeping with these values by linking them to job behavioral assessment, and by having executives and employees play a part in cultivating the values by serving as role models for executives and compiling recommendations from the workforce. 1.8.4 Promote Knowledge Sharing (KM) to stimulate and nurture an understanding of and skills in knowledge sharing in all professional functions. 1.8.5 Other highlights: • “IRPC New DNA Moving Together” to publicize and cultivate corporate values among employees to create a new corporate culture in line with IRPC’s growth.

2. Social IRPC is committed to running its businesses while highly valuing responsibility to society, communities, and the environment. It cultivates a sense of voluntarism among employees, who should command awareness

Volanturs' Hearts for Commanity Development Projec

ASIA RESPONSIBLE ENTREPRENEURSHIP AWARDS 2017 FROM ENTERPRISE ASIA

of doing business with responsibility, transparency, and fair benefit-sharing with all stakeholders. The ultimate aim is to raise the quality of life and improve society. Our CSR highlights are listed in “Corporate Social Responsibility” page 186-204.

3. Environmental Taking quality, safety, occupational health, and the environment seriously, IRPC has adopted international standards to constantly improve process efficiency and develop product quality with a focus on keen attention to the surroundings, minimized pollutants, energy conservation, and efficient greenhouse gas (GHG) management on its way to Eco-Industry under CSR-DIW of the Ministry of Industry. All these accompany the establishment of good surroundings that are safe for communities, while cultivating safety and occupational health awareness and culture for its workforce.

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NATIONAL OUTSTANDING WORKPLACE FOR SAFETY, OCCUPATIONAL HEALTH AND WORK ENVIRONMENT AWARD 2017 FROM THE DEPARTMENT OF LABOUR PROTECTION AND WELFARE.

GREEN INDUSTRY 4 (GI 14) AWARD, PRESENTED TO 15 PLANTS

The highlights of environmental tasks this year were listed under “Quality, Safety, occupational Health and Environment (QSHE)” page 205-212.

4. Corporate Governance

IRPC values the continuous improvement of corporate governance in line with international standards and SET. Major accomplishments of corporate governance were listed under “Corporate Governance Report” page 56-79.

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5. Risk Management IRPC’s focus is on enterprise risk management by relentlessly improving its risk management system, announced for the Board, executives, and employees to efficiently implement. It defined a structure for such management by appointing a President-led Risk Management Steering Committee. A Board-appointed Risk Management Committee consists of at least three directors to devise policies, steer, and guide IRPC’s risk management to keep corporate risks manageable and forge confidence among investors in goal achievement. In addition, IRPC appointed the Supply Chain and Financial Risk Management Committee, chaired by the President, in charge of tracking and analyzing market situations, managing risks concerning the prices and volumes of crude, raw materials, feedstock, petroleum and petrochemical products, freight, and financial transactions. IRPC has applied international-standard risk management systems ISO 31000-2009: Risk Management–Principles and Guidelines and COSO –Enterprise Risk Management to its risk management practices along with the principles of good corporate governance, the internal control system, the business continuity management system, the anti-corruption approach, sustainability management approach, and OEMS (Operational Excellence Management System). Also, it has developed tools to give risk management higher efficiency, including the definition of KRIs (key risk indicators) as an alert for risk events. The application of VaR (Value at Risk) aids the assessment of preliminary risk values to help IRPC define suitable risk management measures. Below are this year’s highlights on risk management.

5.1 Price volatility risks:

These stemmed from the highly volatile global economy arising from some countries’ policies with significant bearing on the economy and politics, and from unrest and terrorism in several regions, all of which affected the price trends of crude oil, which is IRPC’s main raw material. IRPC’s mitigation approach is as follows. 5.1.1 Closely monitored and analyzed price situations and promptly reported to the management for preparedness 5.1.2 Engaged in production/ process planning by constantly acquiring new grades of crude oil to give IRPC flexibility for choosing a wide variety of crude oil for lower costs 5.1.3 Managed the stocks of crude oil, petroleum and petrochemical products such that there are minimum impacts from stock gains or stock losses 5.1.4 Engaged in contracts on derivative trading with set targets for prices, volumes, and periods for suitable risk management in keeping with business plans under the oversight of the Hedging Committee and the Risk Management Committee. 5.1.5 Reviewed related crude oil purchasing processes to raise efficiency and lower risks arising from operating processes by developing RCM (Risk Control Matrix) and control assessment so that operators may develop awareness for performing their duties completely and efficiently

5.2 Operation risks:

Process or process support risks may affect IRPC’s personnel, stakeholders, assets, or income opportunities. Therefore, IRPC should engage in risk management concerning SSHE (safetysecurity-health-environment), the failure to achieve planned production, communities, various crises, and water management. Below are mitigation measures.

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5.2.1 Promoted the safety culture by making it a policy and undertaking various activities, including the application of Process Safety Management; education and fostering of safety awareness among all employees, contractor employees, and workers; Outsource Safety Man Project; and Goal Zero 365 Days Project to campaign for accident reduction. In addition, a safety compliance inspection team was set up to ensure strict compliance. As a result of these moves, IRPC managed to lower its accident rate to meet its goals on a par with industrial peers and set a goal to continue lowering accidents each year. 5.2.2 Integrated various units and planned together with unity to cut redundancies and accommodate assorted risks associated with the 2017 maintenance turnaround, including controlling contractorsâ&#x20AC;&#x2122; practical compliance with safety rules; starting up plants safely and as planned after the turnaround; safe work in closed space; system preparation for a good environment; traffic planning; developing vigilance plans; and developing a close surveillance system for community impacts. 5.2.3 Relentlessly implemented risk management measures, a result of the project to improve and develop for higher efficiency and stability of machinery and tools by thoroughly inspecting machinery and tool conditions in plants, especially at risky points.

5.2.4 Focused stringently on proceeding with business under laws and regulations on safety and the environment, the TIS/OHSAS 18001 management standard for occupational health and safety, and the ISO 14001 environmental management standard.

Elderly in Chaeng Noen Distric, Rayong Province visited IRPCâ&#x20AC;&#x2122;s EEC.

5.2.5 Regularly established understanding and cordial relations with community neighbors of the industrial zone, including the construction and renovation of public utility systems, support to local entrepreneurs, scholarship granting, education on IRPCâ&#x20AC;&#x2122;s businesses through the likes of the Open House Project, a field coordination center for site engagement in community activities, and participation in emergency drills with communities and public agencies. 5.2.6 Applied OEMS fully to ensure that various aspects of work were always efficient and effective. IRPC also invited experts from PTT Group to assess its OEMS to identify development and improvement aspects. 5.2.7 Implemented BCM (Business Continuity Management Standard) by first developing a BCP (business continuity plan) to handle crises and emergencies, including plan drills, by applying ISO 22301 (Business Continuity Management System) fully to guide preparation for such crises. 5.2.8 Implemented the 3Rs (reduce, reuse, recycle) including digging a 5-million-cubic-meter reserve pond for water reserve for processes during a period of water shortage from natural sources.

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5.3 Capital project risks:

This concerns the Fully Integrated PP Project to grow in line with the strategic plan and preserve competitiveness in this project. IRPC’s mitigation measures this year were as follows: 5.3.1 Prepared assorted resources to support and efficiently drive the project toward its goals, including personnel and financial support. 5.3.2 Developed systems and processes for closely monitoring business updates and remedy problems swiftly to ensure that the project could achieve all its goals. 5.3.3 Established marketing and sales plans to accommodate the volumes of new products to ensure that all the produced goods are saleable and have enough markets.

5.4 Organizational capability risks:

This means the enhancement and development of corporate capability for excellence, including shaping personnel into smart and conscientious people through IRPC’s core values. To elaborate, IRPC must be ready in both qualities, and there must be enough of them to drive IRPC strategies toward the goal in a sustainable way. Below are IRPC’s risk management moves. 5.4.1 Cultivated a corporate culture for work through the IRPC DNA so that the workforce may adhere to it in enhancing the efficiency and effectiveness of their businesses. 5.4.2 Defined a suitable approach for IRPC corporate restructuring so that it may compete with companies in the same industry. 5.4.3 Defined plans to appoint people to key positions and defined systematic performance appraisal processes to accommodate retiring executives and enable job transfers to go smoothly without affecting business. 5.4.4 Systematized knowledge management, particularly knowledge in key professions that may vanish once people resign or retire, including knowledge about machinery control and maintenance.

5.5 Policy and regulatory risks:

This concerns the monitoring and preparation for public policy-making and issuance of laws and regulations that may affect current businesses and IRPC’s future business extension, including the Oil Fund Act, crude oil reserves, new accounting standards and tax laws, Land and Building Tax Act, and land code. Below are IRPC’s risk management moves. 5.5.1 Monitored public-sector news and intelligence that may affect business or operation and inform relevant parties so that they may map out action plans or approaches for dealing with risks and seek business opportunities amid changes in policies, laws, and regulations. 5.5.2 Set up task forces to study draft laws, applicable acts, and privileges before proclamation or enforcement by assessing positive and negative impacts to IRPC and presenting to the management and related parties so that they may systematically act and monitor such items. 5.5.3 Joined CAC in anti-corruption efforts, establish corruption risks, and develop risk mitigation approaches. 5.5.4 Followed the procedures of the land code in revoking roads and canals, and change in public places lying on the extended industrial zone to ensure that IRPC’s actions are legitimate and minimize conflicts with communities as well as litigation. To this end, an ad hoc task force was formed to take action and minimize potential impacts in an integrated way.

5.6 IT security & crime:

Since IRPC relies heavily on IT systems as a business tool, the threats of attacks and of cybercrimes have multiplied in various forms, implying massive damage. Therefore, IRPC has mapped out proactive measures to prevent and minimize such threats. Below are IRPC’s risk management moves. 5.6.1 Set up a Security Operation Center (SOC) to supervise and audit access to various corporate systems and detect anomalies should there be an attack from outside IRPC in a quick and efficient way

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Performance Summary

5.6.2 Educated and taught security officers skills by enrolling them in training, seminars, and knowledge-sharing with external agencies, as well as testing their knowledge with ComTIA Institute to apply for ICT Security Certificates. 5.6.3 Acquired ISO 27001 (Information Security Management System) certification to boost confidence in the effectiveness and efficiency of corporate IT security together with steps taken to comply with applicable requirements, provisions, and regulations. 5.6.4 Underwent the annual drill under the Disaster Recovery Plan, which may involve attacks from the outside, damaged equipment, or assorted disasters. 5.6.5 Educated and forged awareness among the workforce of the safe use of computers and software, avoid viruses, malware, or attacks in various forms. To this end, dedicated teams counseled, trained, warned, and solved problems for the workforce.

5.7 Emerging risks:

This involves the analysis of the environment and external trends that could impact IRPC in the long-term by assorted external factors, including political, economic, social, environmental, legal, and technological ones. These risks must be assessed and presented to the management. Below are IRPC’s risk management moves.

5.7.1 Tracked information and analyzed public policies, including draft acts on Eastern Region special economic zones, including the EEC (Eastern Economic Corridor) policy, which would affect current businesses favorably or adversely. On the positive side, IRPC set up a task force to comprehensively investigate this matter, including growth in sales and marketing, exploitation of IRPC’s land, industries that promote infrastructure and public utilities, and potential privileges. As for the negative side, IRPC has become poised to handle impacts such as the development of an urban society. To elaborate, population migration and denser communities around the industrial zone could mean more conflicts or more complaints. 5.7.2 IRPC recognized the advent of the EV car technology, which would affect IRPC’s future, particularly the petroleum product group, including gasoline, diesel, and lubricants, in view of the likely drop in fuel sales volumes as the number of EV cars grows. IRPC therefore analyzed EV car growth, which could significantly affect itself in the next 5-10 years, and formulates mitigation measures, including business transition from petroleum to more petrochemicals, product R&D that caters to markets of the future, and establishment of cooperation with business partners to grow markets or seek more sources to place IRPC’s products.

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2017 Annual Report IRPC Public Company Limited

BUSINESS STRATEGIES PERFORMANCE HIGHLIGHT 2017 EVEREST PROJECT

The EVEREST Project strives to drive IRPC toward its vision, while driving goal achievement through 14% or higher in ROIC in pursuit of the Top Quartile in 2020, this year forging roughly Baht 7,218 million in EBIT for IRPC.

UHV PROJECT

This year, UHV Project posted the total production output of propylene of 320,000 tons per year. IRPC has continued to add values from its UHV Project as follows: • Maximum capacity of gasoline production to forge higher revenues of approximately 870 million baht. • The development of Catalyst (RDCC Catalyst Reformulation) can increase the amount of propylene production from 18 percent to 21 percent. • The installation of heat connection machine from catalyst to increase production capacity project.

LEADING INTEGRATED PETROCHEMICAL COMPLEX IN ASIA BY 2020 OPERATIONAL EFFICIENCY IMPROVEMENT ASSET UTILLIZATION ENCHANCEMENT PRODUCT AND SERVICE IMPROVEMENT CAPACITY AND PRODUCTS EXPANSION

MARGIN IMPROVEMENT • • • •

The Delta Project yielded the total revenues of more than 134 million US dollars.

PROJECT COMPLETION AS FOLLOWS:

• CHP I Electricity +220 MW/ hour, steam +420 tons/ hour • PRP Propylene +100 KTA • EURO IV Gasoline 15 KBD, diesel 10 KBD, jet 15 KBD • TDAE 28,000 KTA/ year, 150 BS 25,000 KTA/ year • EBSM 80,000 KTA/ year, ABS/SAN 60,000 KTA/ year • Lube Blending 50 million liters/ year

2014

2010

Production excellence Commercial excellence Procurement excellence Human resources excellence

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Business Strategies

REVENUE GROWTH OF 5% EBITDA GROWTH OF 10%

BIG

PPE/PPC PROJECT

PPE PROJECT: Polypropylene Production Expansion (PPE) Project to increase production capacity of polypropylene to 635,000 tons per year. Commercial production and operation will be completed in September 2017. PPC PROJECT: This project seeks to improve and expand Polypropylene Compound and Specialties (PPC) production capacity to 140,000 tons per year, expected to be completed for revenue generation in December 2017.

STRONG

LONG

INCREMENTAL MARGIN ORGANIZATION HEALTH

MEMBER OF DJSI EMERGING MARKETS UNIVERSE

GDP STRATEGY G: POWER OF GROWTH

• Capacity Building • Development of operation procedures • Fostering of organization culture

• Mars Maximum Aromatics Production • EVEREST forever (E4E) • M&A (Merger and Acquisition) • R&D Excellence

The UHV Project will be completed and commercially operated in September 2017, with an increase in propylene production capacity of 320,000 KTA/ year.

ROIC

14%

D: POWER OF DIGITAL • IRPC 4.0

FULLY INTEGRATED PP

• PPE production capacity of 160,000 KTA/ year • PPC increased production capacity of 140,000 KTA/ year

1ST QUARTILE ROIC IN PETROLEUM AND PETROCHEMICAL INDUSTRY

P: POWER OF PEOPLE • IRPC DNA

2020

2018

2016 I NDIVIDUAL OWNERSHIP S YNERGY P ERFORMANCE EXCELLENCE I NNOVATION R ESPONSIBILITY FOR SOCIETY I NTEGRITY & ETHICS T RUST & RESPECT

IRPC has defined a vision and business strategies to become a “Leading Integrated Petrochemical Complex in Asia by 2020”. To achieve this objective, new projects and business operation that enhance higher revenues have been implemented, resulting in 14 percent of ROIC, leading the Company toward the Top Quartile performance of petrochemical industry by 2020. IRPC has also achieved competitiveness and sustainable business growth, coupled with responsibility for society, community and environment. According to such visions and objectives, IRPC has implemented various strategic projects since the past up until present, including the future planning of important projects to ensure its goal achievement as established.

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2017 Annual Report IRPC Public Company Limited

EVEREST Project

CAMP 2 (21,000 ft)

CAMP 1 (19,500 ft)

2017

2016

BASECAMP (17,500 ft)

The EVEREST Project strives to drive IRPC toward its vision of a “Leading Integrated Petrochemical Complex in Asia by 2020”. Thanks to implemented best practices to its corporate management and operation by a world-class consultant company, the project is pivotal to corporate caliber upgrading in tandem with development of the corporation and its personnel. Since late 2016, IRPC has begun assessing and analyzing ways to raise business process efficiency together with process efficiency and organizational administration to define its strategies and plans. The project embraces five key aspects: operation,

commercial, procurement, corporate, and organization health. Ways to enhance personnel management efficiency were identified to spur self-development and forging of mindsets, core values, and the corporate culture. All these will contribute to staff operation at full steam in the same direction. This year the project successfully contributed Baht 7.218 billion in EBIT. The project’s peak EBIT goal is Baht 10.5 billion in 2018. As planned, the OHI goal is set at the top quartile at 74 or more. As a result, by 2020 IRPC should achieve the goal of a top-quartile performance to sustainably maintain decent EBIT.

167

EVEREST Project

EVEREST FOREVER

2020

EBITDA 29,029 MTHB

2019

2018

HEIGHT 29,029 ft

CAMP 4 (26,300 ft)

CAMP 3 (23,500 ft)

Actual EBIT (Baht million)

Year’s performance Performance

Operations: Efficiency improvement from crude oil and returns improvement through modification of process units, higher energy efficiency, improved efficiency of maintenance, and operation loss reduction Integrated Supply Chain: Efficiency improvement from supply chain management to cut costs and production planning to enable processing units to proceed at full steam, thus maximizing profits Commercial: More trade value added from refining and petrochemical products Procurement: More efficiency in timing and expenses of refining units’ shutdowns for inspection and maintenance, and improved efficiency for procurement of equipment and high-expense goods Corporate: The corporate area management to develop the Company’s potential in maintaining the efficiency in managing its expenditures Human Resource: Efficiency improvement in HR cost management for maximum efficiency Total

Organization Health

Organization Health Index: Improve all personnel’s caliber with a 1st Quartile (OHI score) goal * Organization Health Index score as of January 2017

EBIT goal (Baht million)

3,011 2,751

2,077 1,921 1,179 1,348 411 353 323 330 217 813

7,218 7,516 SCORE SCORE 86* >74

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2017 Annual Report IRPC Public Company Limited

Human Resources Administration With IRPCâ&#x20AC;&#x2122;s challenging business targets, the management and all employees are aware of their mission to deliver their best performance. Therefore, capability development and motivation creation are continuously in the work plan. In 2017, ongoing HR projects to drive human resources to excellence to support IRPCâ&#x20AC;&#x2122;s vision are summarized as follows:

1 Leadership Development:

2 Performance Management:

Leadership development needs much time and many resources. Five leadership skills that IRPC focuses on are entrepreneurship, change management, team development, self-development, and corporate values role model. Besides, IRPC strives to craft a leadership assessment (180-degree assessment), of which the result can be analyzed and used in the development of an individual development plan (IDP).

This is a key factor of human resources administration since appropriate performance management contributes to corporate success and can motivate employees to continue delivering even better performance in the short and long terms. The performance management process is designed to formulate proper correlations among these factors: input, process, outcome, and impact.

Input Corporate value that is normalized thinking and performance of each employee to deliver optimal effectiveness and efficiency. Capability of the individual is the norm in the professional aspect and the position/ level aspect

Process

Output

Impact

In the performance management process, definition and transfer of objectives and targets are conducted deliberately, with a monitoring system to check progress and obstacles so that recovery can be made during the year.

IRPC defines output in a broad sense to ensure organizational development. It therefore defined that performance comprises three factors: outcome, knowledge and skills, and corporate values.

Performance. Individuals will realize the value they have toward the success of the organization, either in cash or in noncash form (stakeholder satisfaction, work process development, and effective knowledge management).

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Human Resources Administration

IRPC launched IRPC DNA project to promote employees’ acknowledgement of desirable behavior for the organization.

Development talent and skill for 1,200 employees in supervisor level of each field who are also member of Smart Leader Group to apply such knowledge with his/her own department.

IRPC DNA CHALLENGE for senior executives to foster their awareness of change for the betterment by setting up goals with each individual and organization that ultimately leads to sustainable success under “I’m Changed”.

To encourage employees to search for guidelines for behavior development and improvement while emphasizing on concrete action.

3 Corporate Value Creation: IRPC always creates a work atmosphere that instills corporate values. The management and employees are engaged in value cultivation, by being a management role model and by collecting employees’ opinions. In addition to the continuous mission described above, Human Resources has promoted Knowledge Management (KM) in order to forge understanding across the Company, which will enable knowledge transfer among themselves. With the development in every aspect as mentioned above, IRPC is assured that its employees are more than ready to deliver great performance and confidently face the changing business environment.

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2017 Annual Report IRPC Public Company Limited

4 Evaluation of Operational Performance on Human Resources IRPC has analyzed the results of the survey on corporate health indicators by measuring the organizational readiness in 3 aspects and 9 factors. The 9 factors representing the readiness of the organizations are as follows: 1. Organizational Direction 2. Leadership 3. Work Environment 4. Accountability 5. Coordination and Control 6. Capabilities 7. Motivation 8. External Orientation 9. Innovation and Learning The corporate health assessment from 2015 led to the improvement in 3 areas; Accountability, Performance Management (Coordination & Control), and People Capability. The operation has been done continually. In 2017, there was the additional development on various processes as follows: 1. Accountability: The organizational structure was improved and the responsibilities in the structure were clearly shared for the IRPC to be able to compete timely for the changes in the digital era.

2. Performance Management: IRPC had analyzed and developed the operational performance management systems to be the management tool in the organization that pays great attention to the work process both on the results and success of the work including the performance efficiency and desirable behaviors of the operators used in enforcing the work to be successful. As a result, IRPC had improved the new composition of the performance assessment by increasing the proportion of competency assessment to the employees at all levels in order to achieve the Companyâ&#x20AC;&#x2122;s goal sustainably. 3. People Capability: There was the arrangement of the leadership development program using the tools gained from the world leading consultants such as 7 Habits, Lead Program, etc. This included the adjustment of desirable behaviors (IRPC DNA) in order to achieve the corporate culture desired by IRPC. It was found that the 3 factors in the development had higher scores as expected. The results of corporate health indicators as of January 2018 (End of EVEREST Project) were at 86% which was higher than in 2015 of 69% (EVEREST Project Start). IRPC is committed to develop all areas of the corporate health to be at the top quartile. However, IRPC continued to be determined in improving and monitoring continually in the year 2018 and onwards.

2015 OUTCOME SCORE

2017 OUTCOME SCORE 86

69 Direction Coordination & Control

Accountability

External Orientation

Direction

Leadership

Innovation & Learning

Motivation

Capabilities Culture & Climate

Accountability

External Orientation

Coordination & Control

Leadership

Capabilities

Innovation & Learning

Motivation

Work Environment

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Management Discussion and Analysis (MD&A)

Management Discussion and Analysis (MD&A) Executive Summary Unit

2017

2016

Change

Crude Intake

Million bbl

65.54

67.03

(2%)

Sales[1]

Million Baht

214,101

185,041

16%

Net Sales[2]

Million Baht

197,594

168,349

17%

Market GIM

Million Baht USD/bbl [3]

32,370 14.48

31,033 13.04

4% 11%

Accounting GIM

Million Baht USD/bbl

34,638 15.49

30,457 12.80

14% 21%

EBITDA

Million Baht

20,420

17,430

17%

Net Profit

Million Baht

11,354

9,721

17%

Note: [1] [2] [3]

Sales includes (1) Petroleum Sales (2) Petrochemical Sales (3) Power and Utilities Sales (4) Sales of tank farm and port service, etc Net Sales includes (1) Petroleum Sales (excluding excise tax) (2) Petrochemical Sales (3) Power and Utilities Sales Market GIM per bbl: [(Market GIM/ Crude Intake)/exchange rate]

In 2017, the Company reported net sales of Baht 197,594 million, rose by 17% when compared to 2016 due to products price increase following the crude oil price. The refinery utilization rate was 180,000 barrels per day of crude intake, or 84% utilization rate, only 1% declined from last year due to approximate 1 month of the Companyâ&#x20AC;&#x2122;s Major Turnaround. After its major turnaround, the Refinery plant efficiency has been improved at high level of utilization rate. Moreover, additional 160,000 ton per year of Polypropylene Expansion Project (PPE) and 140,000 ton per year Polypropylene Compounding Project (PPC) commenced their commercial operations from September 2017 and December 2017, respectively. The Market GIM was Baht 32,370 million (USD 14.48 per barrel), increased 4% from last year because of the value-added products towards the full-year operation of UHV project and the

commencement of PPE project as well as the lower of Crude Premium over Dubai. Whereas it had major turnaround and most of petroleum and petrochemical spreads dropped during 2017. In 2017, the Company had the stock gain of Baht 3,720 million according to the continuous rise of crude NET SALES

UNIT : MB

2017

2016

INCREASE

17%

197,594

68%

PETROLEUM

30%

168,349

PETRO POWER & CHEMICAL UTILITIES

67%

PETROLEUM

31%

PETRO POWER & CHEMICAL UTILITIES

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2017 Annual Report IRPC Public Company Limited

oil price versus the oil hedging loss totaling Baht 1,452 million. Hence, the company reported Accounting GIM of Baht 34,638 million (USD 15.49 per barrel) increase by 14%. 2017 EBITDA was Baht 20,420 million, an increase of 17% caused by the higher GIM as mentioned above. Meanwhile, the depreciation and financial costs increased due to an increase of those expenses after the COD of UHV and PPE projects. The company recoded FX gain amounting to Baht 764 million due the Thai Baht appreciation and gains from investment amounting to Baht 577 million which mainly the performance improvement of the associated company, Ube Chemicals (Asia) Plc., and gains from disposal of other long term investment. There were non-recurring items in 2017; gains from reversal of impairment from disposal of investment property amounting to Baht 794 million. In 2017, the company recorded Baht 2,181 million, an increase of Baht 1,899 million from last year. The increase was due to 2016 tax benefit from corporate income tax of Baht 1,449 million from the deferred tax asset of tax loss carry forwards and subsidiaries’ liquidation. As a result, net profit was Baht 11,354 million, increasing by 17%.

Key incidents in 2017

• According to Thai Accounting Standard 40, Investment Property, requires the Company to disclose the fair value of assets in the financial statements. The Company provides asset appraisal every 3-5 years in the event that there is no effect to the significant increase or decrease of assets value. From company’s previous asset appraisal in 2012, there were some lower value than cost of investment property, hence, the company recorded impairment on those investment property in amount to Baht 708 million. This year the Company provided the asset appraisal and resulted in the higher value in investment property than 2012 asset appraisal. Hence, the company assessed an increase in the company’s and its subsidiary’s investment property thru the reversal of investment property in amount of Baht 232 million. • In 4Q17, the Company recognized the reversal impairment of its investments which are

related to the pre-rehabilitation managements and the entities relating to them. Those are investments in 3 companies; Pornchai Enterprise Co., Ltd., TPI Holding Co., Ltd., and TPI EOEG Co., Ltd. which were fully impaired in the past. According to the recoverable amount from those investments and their fair values as of December 31, 2017, the company recorded reversal impairment of those investments in an amount of Baht 562 million in 4Q17. • On December 20, 2017, the Board of directors passed the resolution on the approval to dispose the further 25 percent stake holding in IRPC Polyol Company Limited (IRPCP) to PCC Rokita SA (Poland). Therefore, after disposal of 25 percent stake holding in IRPCP to PCC Rokita SA (Poland), IRPC and PCC Rokita SA (Poland) will jointly hold 50 percent stake holding each in IRPCP. The objective of the transaction is to expand the cooperation in production and marketing in high value added polyurethane.

Operating Performance and Financial Position 1 Operating Performance by Business Units 1.1. Petroleum business unit

1.1.1 Petroleum Market Overview Crude oil prices in 2017 was in the range of USD 43-64 per barrel, an average of USD 53.2 per barrel, up from 2016 average of USD 41.3 per barrel. Crude oil prices surged substantially during year ending period. This was owing to the decline of crude oil surplus driven by the faster-than-anticipated global oil demand growth of 1.5 million barrels per day and DUBAI PRICE UNIT : USD/BBL 70 60 50 40 30 20

Jan- Mar- Jun- Aug- Nov- Feb- Apr- Jul- Oct- Dec16 16 16 16 16 17 17 17 17 17

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Management Discussion and Analysis (MD&A)

hit 97.7 million barrels per day towards the global economic recovery, the lower of U.S. oil inventories as well as the extension of 1.8 Million barrel per day production cuts from OPEC and Non-OPEC members till the end of 2018, be extended from the end of March 2018 in order to stabilize the oil price regarding the meeting held on November 30, 2017. The compliance of the oil production cut deal had reached the target.

Moreover, the unrest in the Middle East , the falling of Venezuelaâ&#x20AC;&#x2122;s production below 2 million barrels per day, the lowest level in the past 28 years, as well as the lower crude export to U.S. due to leakage of Canadianâ&#x20AC;&#x2122;s oil pipeline. Nevertheless, the high level and continued growth of U.S. oil productions pressured downed the crude oil price on the long term oil market horizon.

1.1.2 Crude Intake and Capacity 2017

2016

Change

65.54

67.03

(2%)

180

183

(2%)

Refinery

84%

85%

(1%)

RDCC

78%

43%

35%

Lube Base Oil

76%

93%

(17%)

Crude Intake Million barrels KBD Utilization Rate

Crude intake in 2017 was 65.54 million barrels or 180 thousand barrels per day (KBD), 84% of utilization rate, slightly decreased by 1% when compared to 2016 of 67.03 million barrels. This was due to 1 month planned major turnaround during February and March 2017. The Refinery plant efficiency has been improved at high level of utilization rate after turnaround.

The utilization rate of RDCC plant in 2017 was 78%. During the turnaround, the integration between RDCC and Hyvahl production units plus feedstock optimization at Hyvahl unit in RDCC plant be completed both to improve operation capacity and higher the products value. The utilization rate of lube base oil plant was 76%, declining by 17% when compared to 2016 with 93% of utilization rate, mainly owing to planned major turnaround.

1.1.3 Petroleum Sales Products

Sales Volume (Million Barrel)

Sales Value (Million Baht)

2017

2016

2017

2016

52.39

51.98

119,015

98,348

Lube Base Oil

6.43

7.22

16,110

14,804

Total

58.82

59.19

135,125

113,152

Refinery

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2017 Annual Report IRPC Public Company Limited

In 2017, net sales of petroleum businesses were Baht 135,125 million, rising by Baht 21,973 million, or 19% from last year mainly owing to a 20% increase in the average product prices following a rise of crude

oil price while a decrease of sales volume from 59.19 million barrel to 58.82 million barrel, decreasing 0.37 million barrels or 1%. The decreased sales volume was mainly attributed to Fuel Oil and Lube Base Oil.

1.1.4 Petroleum Sales Breakdown Products

2017 Local

2016 Export

Local

Export

Refinery

59%

41%

59%

41%

Lube Base Oil

49%

51%

48%

52%

Total

58%

42%

57%

43%

In 2017, the percentage of domestic and export of petroleum product sales was 58% domestic and 42% export. When 2017 compared with 2016, the percentage of domestic sales slightly increased from

Lube Base Oil while the percentage of export rose from Asphalt product. The export products in 2017 mostly shipped to Singapore, Malaysia and Cambodia, respectively.

1.1.5 The spread between Petroleum products and raw material Average price

2017

2016

53.17

41.27

29%

Petroleum (USD/bbl) Naphtha – Dubai ULG95 – Dubai Gas Oil 0.05%S - Dubai FO 180 3.5%S - Dubai

0.7 14.9 12.5 (2.3)

1.3 14.9 10.8 (5.0)

(46%) 0% 16% 54%

Lube Base Oil (USD/MT) 500SN - FO 180 3.5%S 150BS - FO 180 3.5%S Asphalt - FO 180 3.5%S

498 602 (31)

417 737 (50)

19% (18%) 38%

Dubai Crude Oil (USD/bbl)

The spread between Petroleum products and Dubai

• Naphtha Spread-Lower: Naphtha – Dubai spread in 2017 was USD 0.7 per barrel, decreasing by 46% from 2016 of USD 1.3 per barrel. The decrease was owing to the supply glut according to additional capacity from Middle East and India.

Change

• ULG95 Spread-Flat: ULG 95-Dubai spread in 2017 was USD 14.9 per barrel, equal to last year price. This was pressured by the continuous export from China while the strong demand from driving towards the low gasoline price including the gasoline shortage in U.S. after the hurricane, supported the ULG95 spread.

175

Management Discussion and Analysis (MD&A)

• Gas Oil Spread-Higher: Gas Oil 0.05% S-Dubai was USD 12.5 per barrel in 2017, up by 16% when compared with 2016 of USD 10.8 per barrel. The increase was owing to the higher global demand. However, the incremental supply especially from China, India and Middle East pressed the price down. • Fuel Oil Spread–Higher: Fuel Oil (FO 180 3.5%S)-Dubai spread in 2017 was USD -2.3 per barrel, compared with 2016 of USD -5.0 per barrel, sharply increased by 54%. This was driven by a continuous decline in export from Russia and Europe, resulting in the drop of inventories in Singapore. However, China’s fuel oil demand went down because the independent refineries had received higher crude import allocations from government.

The spread between Lube Base Oil products and FO 180 3.5%S

• 500SN Spread-Higher: Lube base 500SNfuel oil spread in 2017 was USD 498 per ton, increasing by 19% from 2016 of USD 417 per ton due to inventory increase according to the uptrend of crude oil price. • Asphalt Spread-Higher: Asphalt-fuel oil spread in 2017 was USD -31 per ton, soared by 38% from 2016 of USD -50 per ton, mainly due to an increasing demand of road construction in the region.

1.1.6 Gross Refinery Margin

13,742 2,079

10,395

11,663

11,616 (1,221)

2017

UNIT: MB

ACCOUNTING GRM NET STOCK GAIN/(LOSS) MARKET GRM

2016

6,869

6,340

4,794

5,276

11,663

11,616

6.15 0.93

4.37

5.22

4.88 (0.51)

2017

REFINERY LUBE BASE OIL MARKET GRM

In 2017, Market Gross Refinery Margin (Market GRM) of Baht 11,663 million or USD 5.22 per barrel, rose by Baht 47 million or USD 0.34 per barrel from last year. This was mainly caused by better products spread of Gas oil and Fuel oil as well as lower cost from Crude Premium over Dubai. According to an increase in crude oil price, there was the net stock gain of Baht 2,079 million or USD 0.93 per barrel; stock gain of Baht 3,531 million or USD 1.58 per barrel versus oil hedging loss of Baht 1,452 million or USD 0.65 per barrel. Therefore, Accounting GRM was Baht 13,742 million or USD 6.15 per barrel.

UNIT: USD/BBL

ACCOUNTING GRM NET STOCK GAIN/(LOSS) MARKET GRM

2016

3.08

2.66

2.14

2.22

5.22

4.88

REFINERY LUBE BASE OIL MARKET GRM

1.2 Petrochemical business units

1.2.1 Petrochemical Market Overview In 2017, Polymers price had been increased, driven by a rise of feedstock price and high incremental demand towards a higher-than-expected of global economies, especially in SEA countries where their economic growth rate reached 5.3%. Besides, the tight supply in U.S. by the impact of hurricanes as well as a drop of waste plastic import from China regarding environmental issues has buoyed its price. However, the Polyethylene market continues to be under pressure from new capacity while the Polypropylene market has less concern by the delay of Coal to Olefins (CTO) and Methanol to Olefins (MTO) according to low range of crude oil of USD 43- 64 per barrel. This caused

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2017 Annual Report IRPC Public Company Limited

better results in Polyolefin market. Regarding to the Styrenics market, the incremental demand was outpace the incremental supply encouraged by a higher-than-expected of the applianceâ&#x20AC;&#x2122;s demand and the recovery of the automotive industry led by 2%

growth from China. However, the Aromatics was under pressure due to the higher feedstock price following crude oil price amid slow demand, especially in China which lower their Aromatics utilization rates.

1.2.2 Petrochemical Capacity 2017

2016

Change

Olefins Group

87%

90%

(3%)

Aromatics and Styrenics Group

90%

91%

(1%)

Utilization Rate

In 2017, the utilization rate of Olefins and Aromatics & Styrenics were 87% and 90%, respectively, slightly lower than the utilization rate in 2016 due to planned major turnaround. Furthermore, 160,000 tons per year of PPE plant commenced its

1.2.3 Petrochemical Sales Sales Volume (KMT)

Products

Sales Value (Million Baht)

2017

2016

2017

2016

Olefins Group

952

857

35,044

29,780

Aromatics and Styrenics Group

631

677

24,684

22,335

1,583

1,534

59,728

52,115

Total

In 2017, net sales of petrochemical businesses were Baht 59,728 million, rising by Baht 7,613 million or 15% from last year. The main reasons were 12% increase in average product prices following the

commercial operation (COD) since September 2017 and Expandable Polystyrene Plant (EPS) had installed expand machinery and increased the capacity from 30,000 tons per year to 48,000 tons per year, being its COD in September 2017.

increase in raw material prices as well as an increase of 49 Kton or 3% in sales volume. The revenues were 59% from Olefins Group and 29% from Styrenics group.

1.2.4 Petrochemical Sales Breakdown Products

2017 Local

2016 Export

Local

Export

Olefins Group

60%

40%

64%

36%

Aromatics and Styrenics Group

47%

53%

46%

54%

Total

55%

45%

56%

44%

177

Management Discussion and Analysis (MD&A)

In 2017, the proportion of Petrochemical sales were 55:45 as domestic and export accordingly. The export product proportion increased 1% mostly from PP and Propylene products which be shipped to Japan, Singapore and Indonesia and the domestic

sales proportion also increased mainly from Aromatics Group. The petrochemical exported products in 2017 mostly shipped to Hong Kong, Japan and Singapore, respectively.

1.2.5 The spread between key petrochemical products The spread between key products and raw material is summarized below. Average Price (USD/MT)

2017

2016

Change

Naphtha

496

398

25%

Olefins Ethylene - Naphtha HDPE – Ethylene HDPE – Naphtha Propylene – Naphtha PP – Propylene PP – Naphtha

596 235 831 328 328 656

639 209 848 306 350 656

(7%) 12% (2%) 7% (6%) 0%

Aromatics BZ - Naphtha TOL - Naphtha MX – Naphth

324 159 172

245 194 250

32% (18%) (31%)

Styrenics SM - Naphtha ABS - Naphtha ABS – SM PS (GPPS) - Naphtha PS (GPPS) - SM

754 1,334 580 947 193

666 957 291 817 151

13% 39% 99% 16% 28%

The spread between Polyolefins (HDPE/ PP) and Naphtha

• HDPE Spread-Lower: HDPE-Naphtha spread in 2017 was USD 831 per ton, moving down 2% from 2016 due to a rise in naphtha price according to an increase in crude oil price. Meanwhile, an incremental production from U.S. caused a slightly increase in product price. • PP Spread-Flat: PP-Naphtha spread in 2017 was USD 656 per ton, being unchanged from 2016 as a result of stable demand. Though PP price increased according to lower than expected of new supply.

The spread between Aromatics (Toluene and Mix Xylene) and Naphtha

• TOL Spread-Lower: Toluene - Naphtha spread in 2017 was USD 159 per ton, down by 18% when compared to USD 194 per ton in 2016. This was caused by lower demand especially in China as a decline of petrochemical utilization rates. • MX Spread-Lower: Mixed Xylene-Naphtha spread in 2017 was USD 172 per ton, down by 31% when compared to USD 250 per ton in 2016, because of supply gluts especially Asia.

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2017 Annual Report IRPC Public Company Limited

The spread between Polystyrenics (ABS/ PS) and Naphtha

• ABS Spread-Higher: ABS-Naphtha spread in 2017 was USD 1,334 per ton, up by 39% when compared to USD 957 per ton in 2016. This derived from a continued rise in demand led by Chinese for appliance production, an increase in Virgin Plastic demand regarding China’s environmental concerns

as well as tight supply during early 2017 from maintenance shutdown in the region. • PS Spread–Higher: PS-Naphtha spread in 2017 was USD 947 per ton when compared to USD 817 per ton in 2016. It was increased by 16% from high demand in North-East Asia especially China, tight supply from maintenance shutdown in the region, and Korean’s maintenance shutdown in November 2017.

1.2.6 Product to Feed Margin (Product to Feed : PTF) 18,632 189

17,515

18,443

16,869

2017

2016

11,705

12,026

6,738

4,843

18,443

16,869

646

UNIT: MB

ACCOUNTING PTF NET STOCK GAIN/(LOSS) MARKET PTF OLEFINS GROUP ARO & STYRENICS MARKET PTF

In 2017, the Market Product to Feed (Market PTF) of Baht 18,443 million or USD 8.25 per barrel increased by Baht 1,574 million or USD 1.16 per barrel, compared to 2016 due to the better product’s yield after the COD of UHV and PPE projects as well

8.33 0.08

7.36

8.25

7.09

2017

2016

UNIT: USD/BBL

ACCOUNTING PTF

0.27

NET STOCK GAIN/(LOSS) MARKET PTF

5.24

5.06

3.01

2.03

8.25

7.09

OLEFINS GROUP ARO & STYRENICS MARKET PTF

as the higher Styrenics spread. There was net stock gain of Baht 189 million or USD 0.08 per barrel. Hence, the Company had Accounting PTF of Baht 18,632 million or USD 8.33 per barrel.

1.3 Power Plant and Utility business units

1.3.1 Power Plant Capacity and Sales

Utilization Rate Electricity Steam Sales Electricity Steam Others Total

(Unit : Million Baht) 2017

2016

Change

75% 73%

(0%) (0%)

1,629 916 196

1,822 1,059 201

(11%) (14%) (2%)

2,741

3,082

(11%)

179

Management Discussion and Analysis (MD&A)

In 2017, the utilization rate were 75% of Electricity and 73% of Steam, being unchanged from last year. Net sales of power and utility businesses were Baht 2,741 million, decreasing by Baht 341 million or 11% from last year due to the planned major turnaround during 1Q17.

1.4 Total Operating Performance

Total Operating Performance of IRPC and its subsidiaries for 2017 are as follows; Unit : Million Baht

Unit : USD per barrel

2017

2016

2017

2016

34.11 65.55 55.26 214,101 197,594 (165, 224)

35.47 67.03 44.22 185,041 168,349 (137,316)

95.76 88.37 (73.89)

77.83 70.81 (57.77)

32,370 3,720 0 (1,452)

31,033 2,755 290 (3,621)

14.48 1.66 0 (0.65)

13.04 1.16 0.12 (1.52)

34,638 1,423 (1,296)

30,457 1,301 (1,198)

15.49 0.64 (0.58)

12.80 0.55 (0.50)

34,765 (14,345)

30,560 (13,130)

15.55 (6.41)

12.85 (5.52)

20,420 (7,062)

17,430 (6,249)

9.14 (3.16)

7.33 (2.63)

13,358 (1,983) 764 832 577 (7)

11,181 (1,481) 104 3 184 43

5.98 (0.89) 0.34 0.37 0.25 -

4.70 (0.62) 0.04 0.07 0.02

Income Tax Gain/(Loss) from non-controlling interests

13,541 (2,181) (5)

10,034 (282) (31)

6.05 (0.98) (0.00)

4.21 (0.12) (0.01)

Net Profit/(Loss)

11,354

9,721

5.07

4.08

Average FX (THB/USD) Total Crude Intake (Mbbl) Average Crude (USD/bbl) (1) Sales (2) Net Sales (3) Cost of Feedstock (Market Price)

Market GIM Stock Gain/(Loss) Lower of Cost or Market Oil Hedging Gain/(Loss) Accounting GIM (4)

Other Incomes Selling Expenses Accounting GIM and Other Incomes OPEX EBITDA Depreciation EBIT

Net Financing Cost Gain/(Loss) from Foreign Exchange Gain/(Loss) from impairment and disposal of fixed assets Gain/(Loss) from Investment Other Expenses

Net Profit/(Loss) before Income Tax

Note : [1] Average market prices of crude used in the production process [2] Sales includes (1) Petroleum Sales (2) Petrochemical Sales (3) Power and Utilities Sales (4) Sales of tank farm and port service, etc [3] Net Sales includes (1) Petroleum Sales (excluding excise tax) (2) Petrochemical Sales (3) Power and Utilities Sales [4] Include sale of lands, port, tank farm and service etc

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2017 Annual Report IRPC Public Company Limited

1.4.1 Market Gross Integrated Margin (Market GIM) ACCOUNTING GIM

MARKET GIM MB

USD/BBL

35,000 30,000

32,370 2,264

2,548

14.48

25,000 20,000

31,033

1.01

18,443

13.04

16,869

1.07 8.25

15,000

7.09

10,000 5,000 -

11,663

11,616 2016

2017

GRM

5.22

5,000

(-5,000)

2016

2017

PTF

4.88

USD/BBL InMB2017, Market Gross Integrated Margin (Market GIM)40,000 of Baht34,638 32,370 million or USD 14.48 per40barrel 35,000 35 3,720 increased by Baht 30,457 1,337 million or USD 1.44 per 3,045 30,000 30 barrel or 11% from 2016, mainly caused by the 25,000 25 benefit from projects completion including UHV and 20,000 20 32,370 31,033 PPE15,000 projects as well as lower15.49 costs from a decline in 12.80 15 10,000 1.66 Crude Premium over Dubai. 14.48 1.28 10

POWER & UTILITIES

13.04

(1,452) 2017

MARKET GIM

(3,621) 2016

(0.65) 2017

STOCK GAIN/(LOSS) + LCM

(1.52) 2016

(5)

OIL HEDGING

1.4.2 Accounting Gross Integrated Margin (Accounting GIM) ACCOUNTING GIM

USD/BBL 20

UTILITIES

USD/BBL 34,638 3,720

30,457

3,045

30,000

25,000

40,000 35,000

20,000 15,000

32,370

31,033

10,000 5

1.66 14.48

5,000 (-5,000)

15.49

(1,452) 2017

MARKET GIM

(3,621) 2016

(0.65) 2017

STOCK GAIN/(LOSS) + LCM

12.80

1.28 13.04

(1.52) 2016

In 2017, Accounting Gross Integrated Margin (Accounting GIM) was Baht 34,638 million or USD 15.49 per barrel, increasing by Baht 4,181 million or USD 2.69 per barrel from 2016. This attributed to an increase in Market GIM of Baht 1,337 million or USD 1.44 per barrel and an increase in net stock gain of Baht 2,844 million or USD 1.25 per barrel.

(5)

OIL HEDGING

1.4.3 Other incomes Other incomes consist of port and tank farm services and other services. In 2017, the Company had other incomes amounting to Baht 1,423 million, increased by Baht 122 million from 2016. This was mostly due to the recognition from securities return which the Company repaid its debts under rehabilitation plan and the period of placing the securities had exceeded the legal period, together with a rise in steam sales from an adjustment of steam selling prices. 1.4.4 Operating Expenses In 2017, the operating expenses of Baht 14,345 million increased by Baht 1,215 million or 9% from 2016 mainly from the staff costs, consulting fee led by the Everest project advisoryâ&#x20AC;&#x2122;s fee ended in 2017 and donation to PTT group educational institutions. The research and development expenses in order to increase the competitive advantage of both existing and new products were amounting to Baht 470 million in 2017. This included researcherâ&#x20AC;&#x2122;s salary expenses related to the research reports as well as payroll for external professional researchers amounting to Baht 339 million and research equipment & tools and others expenses such as the utility expenses amounting to Baht 131 million.

181

Management Discussion and Analysis (MD&A)

1.4.5 Depreciation Expenses In 2017, depreciation of Baht 7,062 million increased by Baht 813 million from last year. This was mainly resulted from an increase of assets after the completion of expansion and efficiency improvement projects such as Polypropylene Expansion Project (PPE) as well as the major turnaround expenses which were capitalized as the assets and be amortized for 5 years. 1.4.6 Financial Costs In 2017, financial costs of Baht 1,983 million increased by Baht 502 million from 2016 mainly from an increase in interest expenses after the COD of UHV project and PPE project since July 2016 and September 2017, respectively.

1.4.10 Corporate Income Tax The corporate income tax was Baht 2,181 million in 2017 and Baht 282 million in 2016, increasing by Baht 1,899 million since the Company recorded deferred tax assets of 2015 loss carry forward and the liquidation in associates totaling Baht 1,449 million in 2016.

2 Financial Positions UNIT: MILLION BAHT

184,544 CURRENT ASSETS 47,583 OTHER 8,637 NON-C/A

1.4.8 Gain/Loss from impairment and disposal of fixed assets In 2017, gain from impairment and disposal of fixed assets was Baht 832 million because the recognition of the reversal impairment from the appraisal in investment property amounting to Baht 232 million and the reversal impairment of long-term investments which are related to the pre-rehabilitation managements and the entities relating to them, amounting to Baht 562 million. The Company recorded fully impaired them in the past. 1.4.9 Gain/Loss from Investments In 2017, gain from investments were Baht 577 million, rising by Baht 393 million from last year mainly due to the better performance from UBE Chemicals (Asia) Plc., the associated company and gains from disposal of investment - Thai Oil Plc. shares amounting to Baht 115 million.

55,812

172,378 39,848 11,169

2,378

PP&E

1.4.7 Gain/Loss from Foreign Exchange In 2017, the Company reported gains from foreign exchange of Baht 764 million, increasing by Baht 660 million from last year, owing to Thai Baht appreciation against USD from the end of 2016 at Baht 36 per USD to the end of 2017 at Baht 32.85 per USD. The Company had outstanding USD debt amounting to USD 125 million at the end of 2017.

38,704

INCREASE

128,324 87,650

AS OF 31 DEC. 17

121,361

CURRENT LIABILITIES L/T LIABILITIES 56,445 (INCL. DUE WITHIN 1 YR) 2,203 OTHER NONCURRENT 81,005 SHAREHOLDERS’ EQUITY 32,725

AS OF 31 DEC. 16

2.1 Assets As of December 31, 2017, the Company had total assets of Baht 184,544 million, increasing by Baht 12,166 million from December 31, 2016. It was due to the following reasons: • Account receivables increased by Baht 2,817 million or 28% mainly from the increase in average product prices according to higher crude oil price. As of December 31, 2017, the overdue more than 3 month account receivables was amounted to Baht 23 million or only 0.18% of the total account receivables. This was incorporated in the provision for doubtful debt of Baht 23 million. The average collection period was 19 days in 2017 versus 18 days in 2016. • Inventories mainly attributed to Finish goods, Raw materials, and Goods in transit increased by Baht 4,269 million or 17% due to the increasing of inventory volume from 9.61 million barrels to 10.53 million barrels according to higher crude intake and increasing in products price. The inventory period was 52 days in 2017, slightly lower from 51 days in 2016.

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2017 Annual Report IRPC Public Company Limited

• Other current assets increased by Baht 649 million or 16% mainly due to an increase in cash and cash equivalents of Baht 103 million, together with other account receivables of Baht 499 million. • Non-current assets increased by Baht 4,431 million or 3% from 2016. This resulted from an increase of fixed assets amounting to Baht 13,545 million, largely contribution from the PP Expansion and PP Compounding assets and the capitalization of major turnaround expenses into Property Plant & Equipment. However, there were partially offset by a decrease from the depreciation and amortization expenses of Baht 7,059 million, deferred tax assets of Baht 2,107 million and other investment of Baht 596 million.

2.2 Liabilities

As of December 31, 2017, the Company had total liabilities of Baht 96,894 million, increased by Baht 5,521 million, compared to the end of 2016. It was due to the following reasons: • Short-terms loans from financial institutions decreased by Baht 3,184 million or 52% mainly due to an increase of cash inflow from operating activities. • Account payables increased by Baht 6,239 million or 32%. It was mainly owing to an increase of crude payable in terms of volume and price when compared to the end of 2016. The payment period

was 43 days, decreasing by 7 days compared to 2016 as the reduction of crude payment term from 90 days to 60 days. • Other current liabilities increased by Baht 2,924 million, mainly attributed to an increase of Baht 1,907 million in a constructions payable, an increase of Baht 1,112 million in excise tax and oil funds payable and an increase of Baht 108 million in accrued bonus. While there was a decrease of accrued interest of Baht 171 million. MATURITY OF LONG-TERM DEBT (UNTI : MILLION BAHT)

THB BOND USD LOAN THB LOAN 13,322 10,652

7,748

4,999

3,362 653

3,117

6,682

17,409

6,886

327

17,409

2,536

3,732

6,355

6,435

2018

2019

2020

2021

>2021

NOTE : LONG-TERM DEBT AS OF 31 DECEMBER 2017

• Long-Terms loan including current portion of long-terms loan decreased by Baht 633 million, mainly caused by drawdown of long term loan amounting to Baht 19,500 million against repayment of loans and bonds amounting to Baht 19,322 million and unrealized foreign exchange gain of Baht 787 million from Thai Baht appreciation.

The details of long-terms debt are shown below (Unit : Million Baht)

USD Bonds Thai Baht Bonds USD Loan Thai Baht Loan

Total less current portion of long-terms loan Net Outstanding Debt

Dec 31, 2017

Dec 31, 2016

Change

0 15,248 4,097 36,467

8,567 22,629 5,204 20,045

(8,567) (7,381) (1,107) 16,422

55,812

56,445

(633)

(10,660) 45,152

(19,704) 36,741

9,044 8,411

• Other non-current liabilities increased by Baht 175 million. This was mainly from an increase in employee benefit obligations by Baht 133 million and deferred tax liability by Baht 42 million.

183

Management Discussion and Analysis (MD&A)

2.3 Shareholders’ Equity

As of December 31, 2017, shareholder’s equity amounting to Baht 87,650 million, which was higher than it was stated as of December 31, 2016 by Baht 6,645 million. This was owing to an increase in net profit amounting to Baht 11,354 million, partially offset by dividend payment amounting to Baht 4,694 million and a decrease in the fair value of available-for-sale of investment amounting to Baht 67 million.

3 Statement of Cash Flow

1. EBITDA 2. Change in operating assets and liabilities 3. Net cash flows from (used in) operating activities 4. Net cash flows from (used in) investing activities 5. Net cash flows from (used in) financing activities 6. Net increase (decrease) 7. Cash at beginning 8. Cash at ending

As of December 31, 2017, the cash balance was Baht 2,145 million. Net cash flow increased by Baht 103 million, which was mainly contributed from the following items. • Net cash inflow from the operation of Baht 20,246 million consisted of EBITDA of Baht 20,420 million and changes in the operating assets and liabilities of Baht 174 million (in 2016, changes in the operating assets and liabilities of Baht 10,206 million derived from the reduction of crude payment term from 90 days to 60 days). The cash outflows from the operating transactions were contributing to cash outflow included an increase of Baht 4,382 million in inventories, an increase of Baht 2,805 million in account receivables and an increase of Baht 507 million in other account receivables, while cash inflow from operating transaction included an increase of Baht 6,239 million in account payables, an increase of Baht 835 million in other payables. • Net cash outflow from investing activities of Baht 9,768 million, mainly from PP Expansion and PP Compounding (PPE&PPC) projects and the capitalized major turnaround expenses.

(Unit : Million Baht) 2017

2016

20,420 (174) 20,246 (9,768) (10,375) 103 2,042 2,145

17,430 (10,206) 7,224 (10,687) 1,929 (1,534) 3,576 2,042

• Net cash outflow from financing activities of Baht 10,375 million; mainly the long-terms loan payment of Baht 19,322 million, the short-terms payment of Baht 3,184 million, the dividend payment of Baht 4,694 million and the interest payment of Baht 2,704 million while there was cash inflow from drawdown of long-terms loan amounting to Baht 19,500 million.

Liquidity and Capital structure

The 2017 current ratio was 0.96 times, increased 0.20 times comparing to 2016 of 0.76 times. This resulted from loan repayment at maturity in 2017 caused the current portion of long-term loan due within 1 years decreased. The company does not have liquidity risk according to its sufficient liquidity from operations. At the end of 2017, Net Debt to Equity ratio was 0.65 times, decreased by 0.10 times from 2016 of 0.75 times due to the an increase in shareholders’ equity as a consequent of improved performance. The Company could make all payments on due date and comply with all of the Financial Covenants.

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2017 Annual Report IRPC Public Company Limited

Investment Plan

The Company’s 5-year investment plan (2018-2022) including projects under study amounting to Baht 53,279 million, attributed into 2018 continued projects from last year of Baht 1,933 million such as UHV Project, PPE/ PPC Projects, and Everest Project as well as projects under study amounting to Baht 34,793 million. The projects under study aims to use internal feedstock to enhance the Company’s Petrochemical value. (Unit : Million Baht) Investment Project UHV and PPE/PPC Projects Everest Project Maintenance Others Total Feasibility study projects Grand Total

2018 Business Outlook 1. Petroleum Business

2018

2019

2020

2021

2022

Total

1,445 488 2,470 1,466 5,869 1,301 7,169

2,354 116 2,470 4,291 6,761

2,425 73 2,498 9,747 12,245

4,947 4,947 9,736 14,683

2,703 2,703 9,718 12,421

1,445 488 14,899 1,655 18,487 34,793 53,279

Crude oil price in 2018 tends to move up from 2017 in the range of USD 60-65 per barrel amid firmed demand growth of 1.3 million barrels per day to reach 98.9 million barrels per day, driven by strong global economic growth, both industrialized and emerging countries. Furthermore, the cooperation among OPEC and Non-OPEC members, led by Saudi Arabia and Russia, to extend the 1.8 million barrels per day production cut agreement till the end of 2018 be extended from the end of March 2018, has encouraged a continued rise of crude oil price. They target to keep OECD (Organization for Economic Cooperation and Development) crude oil inventories below the 5-year Average. In addition, factors to be closely watched in 2018 are the geopolitical issues in the Middle East, including Iraq, Venezuela, Libya, and Nigeria which may result in the tight supply. However, the market might be experiencing supply glut again from the potential 1.4 million barrels per day output of Non-OPEC members, leading by the incremental production of U.S. by 700,000 barrels per day after oil price is in an uptrend. This will put pressure on long-term oil market horizon.

2. Petrochemical Business

In 2018 Petrochemical business tends to grow following the global economic situation recovery of 3.7% global growth forecast especially the emerging countries such as India and Vietnam. Moreover, the lower Chinese consumption for Scrap & Waste plastic in relation with Chinese environmental concerns as well as an increase of petrochemical demand toward “One Belt, One Road” project, strongly support the polymers’ demand growth. However, Polyethylene business remains under pressure mainly due to new U.S. capacity versus few additional capacity of Polystyrenics. Whereas, there are other essential factors and be pressured to petrochemical price recovery including the volatility of oil prices and the depreciation of major currencies such as the Euro, Japanese Yen, Chinese Yuan Renminbi which tends to be depreciated according to the government monetary policy. The depreciation of those major currencies may limit export growth and pressure on global price recovery.

CORPORATE RESPONSIBILITY CORPORATE SOCIAL RESPONSIBILITY (CSR) QUALITY, SAFETY, OCCUPATIONAL HEALTH AND ENVIRONMENTAL MANAGEMENT (QSHE) SUSTAINABLE MANAGEMENT

APPENDIX CORPORATE GOVERNANCE REPORT OF THAI LISTED COMPANIES (CGR) 2016 COMPLIANCE WITH CORPORATE SOCIAL RESPONSIBILITY

186

2017 Annual Report IRPC Public Company Limited

Corporate Social Responsibility IRPC Public Company (Limited) is strongly committed to operate its business by creating organizational values in parallel with sustainable economic, social and environmental development. Throughout its business operation, the Company, not only emphasizes on business management to achieve profitable business performance and create state-of-the-art innovation to enhance competitiveness for its products, both in oil refinery and petrochemical business, but in each and every step of the business operation, the Company also realizes the significance of its accountability towards society, environment and community.

In 2017, the Board of Directors had specified and reviewed operational and strategic plan of both short-term and long-term social responsibility. The Board also agreed to push forward the excellence of good corporate governance and corporate social responsibility plan (CG & CSR Excellence) to achieve sustainable growth as in 2016, with the objective to become a good corporate citizen that builds trust and confidence for all stakeholders regarding corporate governance and social responsibility. IRPC has implemented operational procedures in respect of social responsibility to create values to stakeholders, including society and community as follows:

1 Specify CSR as part of organization’s strategy of sustainable growth CG & CSR Excellence Plan LEADING INTEGRATED PETROCHEMICAL COMPLEX IN ASIA BY 2020 “TO BE GOOD CORPORATE CITIZEN WITH TRUSTWORTHY AND CREDIBILITY IN SOCIAL & GOVERNANCE”

GOOD CORPORATE GOVERNANCE

COMPLIANCE & LEGITIMATE CULTURE

CORPORATE SOCIAL RESPONSIBILITY AND GOOD REPUTATION

ENABLERS: People, System, Technology STANDARD: UNGC, SDGs17, CSV, DJSI, Sufficient Economy, Social Enterprise, Law, Regulations, IRPC Code of Conduct, CG, Compliance, Anti-corruption, Anti-bribery, SET/ SEC/ IOD, ASEAN CG Scorecard, CAC

187

Corporate Social Responsibility

2 Define the criteria in selecting CSR projects Which create balance between impact on society, community, including the Company and duration of projects that may cause such impact to maintain the highest benefits in terms of budget spending, benefit building for every stakeholder as well as strengthening stakeholders’ trust and confidence. THE PORTFOLIO OF SOCIAL INITIATIVES (POSI) ALLOWS COMPANIES TO BALANCE: TIME TO IMPACT/ PROXIMITY TO CORE BUSINESS TIME TO IMPACT

SOCIAL ENTERPRISE 2+ YEARS PLASTIC USERS RESPONSIBILITY

HISTORIC LEARNING CENTER (KHRUA TA PHET TEMPLE)

<2 YEARS

KVIS/ VISTEC

SIRINDHORN NATIONAL MEDICAL REHABILITATION INSTITUTE

ECO INDUSTRIAL ZONE RAYONG

LAM SAI YONG MODEL COMMUNITY RADIO

PROSTHESES FOUNDATION

PRAPADAENG

BiRD WATCHING

CUBIC AWARDS

CHUMPHON

A COIN FOR FOOD

ADJACENT VALUE CHAIN

SURROUNDING ENVIRONMENT

SOCIETY IN GENERAL

IRPC CUBIC ACADEMY

3 Comply with sustainable development goals (SDGs)

Apart from project selection for society based on appropriate criteria, the project’s format was also designed to respond and be in line with SDGs 17 of the United Nations. In 2017, the Company successfully performed and completed all 17 goals of SDGs. IRPC has evaluated the business sustainability by employing DJSI, considered as organization’s goals and objectives in which the Company has been a certified member in oil and gas category for 4 consecutive years. In addition, IRPC had evaluated the progress of its policies on social responsibility, anti-corruption and conformity to sustainable development goals as established by Thaipat Institute in 2017 which stated that “the Company had disclosed more operation information in compliance with sustainability issue that responds to sustainable development goals in the area of economy, society and environment, compared to the average of every organization being evaluated, especially in economic and environmental perspectives, the Company had gained a higher score than the

PROXIMITY TO CORE BUSINESS

average score of other organizations. This, in turn, reflects that the Company has been rated a good level in its operation and information disclosure of all 3 areas. Nevertheless, the Company should review its procedures, including the continuity of business operation to follow-up more efficient performance result which will be employed as valuable insight for further improvement. Details of significant CSR projects in 2017 can be seen in page 192-203.

4 Specify the objectives of CSR projects

for value creation and social transformation

The result has not indicated any significant risks.

5 Risk evaluation in the area of corruption of CSR projects. 6 Constantly educate and encourage participation in proposing initiatives/ activities and guidelines on social responsibility with employees and every stakeholder group.

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2017 Annual Report IRPC Public Company Limited

7 Operate business in line with UN Global Compact (UNGC)

in which the Company has been a certified member since 2011. In 2016, IRPC had participated in the founding of Global Compact Network Thailand: GCNT, one of the networks with the total of 80 membership countries worldwide. IRPC has implemented and adhered to 10 international principles of UNGC, encompassing 4 major areas with responsibility towards its obligations. To achieve this end, the Company has specified Good Corporate Citizenship Policy under the UNGC to be enforced in the Company and IRPC group.

7.1 Human rights

IRPC has valued human rights principle by adhering to UN framework of Protect, Respect and Remedy if any violations of human rights resulting from business procedures occur, in line with CSR guidelines of Care Share Respect, especially for the community surrounding IRPC’s ecological industrial area which are considered a major stakeholder of the Company and to ensure that the Company will operate its business without any violations on human rights in every activity. Consequently, the Company has specified human rights policy for strict compliance within the Company as well as IRPC group. IRPC has consistently protected the right of employees and contractors by conforming to labour laws, favourable work atmosphere, welfare promotion to employees as required by the Company’s regulations, fair security treatment for both employees and contractors such as preparing safety manuals during plant’s maintenance and enforcing strict compliance on such matters. IRPC has also prepared due diligence to evaluate risk on human rights in which sufficient measures responding to such risks have been established. Furthermore, evaluation and rectification procedures for community and environment affected by the plant’s operation have also been set up; for example, 24-hour complaint handling, providing staffs to spontaneously solve the problem in that particular area, disclosing information of activities that may affect the community before, during and after such activities completion. In 2017, approximately 618 visitors had visited 9 EIA standard plants and visited ports for 15 times. The President and senior executives have valued the significance of complaint handling in which complaint handling procedures of every significant issue must constitute of at least one step of auditing. An Internal Audit Department must inform the President of such issue for acknowledgement and problem-solving

while taking into account fair operations procedures and whistleblower’s protection. In 2017, the Company has participated in the seminar and operational meeting regarding human rights, hosted by Human Rights Committee, Ministry of Justice, Thailand Development Research Institute, UN agency and also cooperated with Rights and Liberties Protection Department in organizing a seminar of “Operational meeting to clarify directions in moving the operation forward on the basis of UN principle of business and human rights” as well as attending the seminar with ASEAN Intergovernmental Commission on Human Rights: AICHR in “AICHR Training on Business and Human Right”. Furthermore, the Company also arranged for the Constitutional Court to hold a seminar on community and environmental rights that are in line with the new constitution of the Kingdom of Thailand which illustrates the Company’s strong intention to operate its business while taking into consideration relevant international principles of human rights.

7.2 Labour

The Company has organized 8 labour unions in total, illustrating the freedom of its labour in the establishment of union and certification of right in negotiation. The President acts as the Chairman of employees’ meeting. Nevertheless, any changes in regulations and welfare of employee will be disclosed during such meeting for clear understanding and acceptance. Moreover, the Company has provided various communication channels for personnel’s acknowledgement, suggestions, recommendations and complaints such as Intranet Teammate Blog and

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P.O.Box 35 etc. However, the Company have never employed child labour or forced labor while simultaneously emphasizing on indiscrimination of employment and occupation in which employment will be considered from an appropriateness of work condition in various job positions for safety and security issues. 7.3. Environment IRPC has strongly adhered to environmental responsibility guidelines as prescribed by international standards and has successfully implemented these established guidelines more than minimum legal requirements as can be seen from the report on safety, occupational health and environment on page 205-212. 7.4 Anti-corruption The Company strives to build faithful and transparent organizational culture by stressing on strict anti-corruption policy throughout the organization with an implementation on policies and concrete practice. Therefore, in 2016, the Board established concrete anti-corruption policies and guidelines; for example, anti-corruption and anti-bribery policies to be enforced with every personnel of every level, both in the organization and its group. No gift policy and promotion of the establishment of anti-corruption network for the Company’s stakeholders; namely, commercial partners, subsidiaries, joint ventures and contractors. The Company have continuously enforced such policies throughout 2016-2017.

Business operation in compliance with ISO 26000

The top management has realized the significance of responsible business operation to foster stakeholders’ confidence and to improve the Company’s image. Significant operation in 2017 based on ISO 26000 and guidelines for social accountability and guidelines for CSR report of SET will be described below:

1. Corporate governance

IRPC has strictly and consistently operated business in compliance with corporate governance of the Company. Details on corporate governance on page 56-79. 2. Fair business operation IRPC has prepared corporate governance and business ethics handbook and promotion of regulations compliance handbook which have been published on the Company’s website and reviewed annually to strictly enforce compliance of employees of every level. Details are further explained in corporate governance report page 56-79.

3. Anti-corruption

4. Respect of human rights

5. Equitable treatment of labour

6. Responsibility for consumers

IRPC has strictly conformed to its anti-corruption policies as can be seen from corporate governance report page 56-79. IRPC respects and encourages the protection of human rights as declared in UN Global Compact: UNGC, with equitable treatment regardless of any similarities or differences in terms of race, religion, gender, age, education background and social status. The Company also values an individual’s right and freedom while striving to protect personal information. IRPC emphasizes on equitable treatment of labour by adhering to UN Global Compact. The Company has set up operation system with an emphasis on safety and appropriate workplace sanitation. In addition, the Company regularly improves and enhances employees’ potentials and skills with regard to Individual Development Plan (IDP) with the use of performance management system while simultaneously supervising and improving employees’ welfare as deemed appropriate. Moreover, evaluation of employees’ involvement and satisfaction towards the organization for future development have been implemented as well. Details can be seen in corporate governance report on page 56-79.

IRPC has defined efficient management strategy regarding channel distribution for its products by taking into consideration different consumers’ behavior and requirements while stressing on the highest level of customer satisfaction and establishment IT system to handle important databases for each business type in effective response to customers’ requirements such as IRPC Relationship Information System (IRIS) to be in compatible with customer relations management of petroleum business. The Company also gathers business information to be employed as database for analysis to respond to customers’ needs and requirements while systematically solving customers’ complaints, including CRM IAsset system, launched in 2015. As for the future, the Company can employ technology as stated in IRPC 4.0 policy to respond to customers and consumers’ needs more efficiently. 7. Community and society development Details of social responsibility projects in 2017 will be further explained on page 192-200.

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CORPORATE SOCIAL RESPONSIBILITY PROJECTS WHICH ARE TIED TO NATIONAL STRATEGY IRPC has consistently operated its business on the foundation of corporate governance in conformity to UN Global Compact which stresses on honesty, transparency coupled with a concern on social and environmental responsibility and human rights with an effort to achieve 17 sustainable development goals. Such objectives are tied to sustainable development goals, national strategy, economics of the nation and social development plan no.12 and also enforced in the Constitution of Thailand, section 65 which states that the objective of sustainable development must be included in the strategic plan. IRPC; therefore, strongly believes that the organization striving to create innovation for sustainability and operate its business with responsibility will successfully become the future leader.

Problems and sustainable development goals 1 Disparity between the rich and the poor

(Ref TDRI)

Strategic plan no. 3 the development and reinforcement of people’s capability Strategic plan no. 4 the creation of opportunity for social equality

SUSTAINABLE DEVELOPMENT GOALS-SDGs

IRPC’s projects • Lam Sai Yong model project • Community enterprise project • Prostheses Foundation of Her Royal Highness the Princess Mother “Give Never Stop” project

2 Premature pregnancy

• Promotion of women’s right project • Muslim Foundation for Underprivileged Youth project

3 Changing climate affecting epidemic

• Eco Industrial Zone • Restoration, conservation and protection of mangrove forest project • Natural trail and mangrove forest view tower • Reforestation project to protect waves (Chumporn)

Strategic plan no. 3 the development and reinforcement of people’s capability

incidence

Strategic plan no. 1 Security issues Strategic plan no. 3 the development and reinforcement of people’s capability Strategic plan no. 4 the creation of opportunity social equality

4 Changing educational values Strategic plan no. 3 the development and reinforcement of people’s capability Strategic plan no.4 the creation of opportunity for social equality

5 Medical treatment right

Strategic plan no. 3 the development and reinforcement of people’s capability Strategic plan no.4 the creation of opportunity for social equality Strategic plan no.6 balance adjustment and development of public management

6 Unbalanced cost of living and wages

Strategic plan no. 3 the development and reinforcement of people’s capability Strategic plan no. 4 the creation of opportunity for social equality Strategic plan no. 6 balance adjustment and development of public management

7 Natural disaster and its prevention Strategic plan no. 1 security issues

Strategic plan no. 2 the creation of competitiveness Strategic plan no. 5 the building of growth on environmental friendly quality of life Strategic plan no. 6 balance adjustment and development of public management

• Cubic Academy project • 1 for 9 project • School for the elderly, Amphoe Mueng Rayong • The Legend of Mon Phra Padaeng • Pan Nam Jai Clinic for community • Give Never Stop project • Mobile medical unit to check-up health for the community project • Project to monitor the wellness of people • Health Promotion Fund for communities surrounding IRPC Industrial Zone • Sarn Palung Social Enterprise Co., Ltd. • Employment opportunity for mooring rope project • SE (Social Enterprise) • IRPC Technological College

• Eco Industrial Zone • Restoration, conservation and protection of mangrove forest project • Lam Sai Yong model project • Green Port (MARPOL)

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17 Goals to Transform Our World 1. No Poverty 2. Zero Hunger 3. Good Health and Well Being 4. Quality Education 5. Gender Equality 6. Clean Water and Sanitation 7. Affordable and Clean Energy 8. Decent Work and Economic Growth

9. Industry, Innovation and Infrastructure 10. Reduced Inequalities 11. Sustainable Cities and Communities 12. Responsible Consumption and Production 13. Climate Action 14. Life Below water 15. Life on Land 16. Peace, Justice and Strong Institutions 17. Partnerships for the Goals

Problems and sustainable development goals 8

IRPC’s projects

Drought and need for agricultural products

Strategic plan no. 1 security issues Strategic plan no. 2 the creation of competitiveness Strategic plan no. 5 the building of growth on environmental friendly quality of life

SUSTAINABLE DEVELOPMENT GOALS-SDGs

• Lam Sai Yong model project • Community enterprise project

Promotion of maximization of space utilization Strategic plan no. 2 the creation of competitiveness Strategic plan no. 5 the building of growth on environmental friendly quality of life Strategic plan no.6 balance adjustment and development of public management

• Combined He and Power Plant (CHP) • RDCC plant • Protection Strip project

10 Coastal fishery area and inundation

• Eco Industrial Zone • Restoration, conservation and • protection of mangrove forest project • Green Port (MARPOL)

11 Promotion of tourist attractions in various

• The Legend of Mon Phra Padaeng • Rak Le Rak Silp Tin Tai project (Love the sea and arts in southern provinces’ project) • Restoration, conservation and protection of mangrove forest project • Natural trail and mangrove forest view tower

Strategic plan no. 5 the building of growth on environmental friendly quality of life Strategic plan no. 6 balance adjustment and development of public management

dimensions

Strategic plan no. 2 the creation of competitiveness Strategic plan no. 5 the building of growth on environmental friendly quality of life Strategic plan no.6 balance adjustment and development of public management

12 Thailand, a door to the new world Strategic plan no. 1 security issues Strategic plan no. 2 balance adjustment and development of public management

13 New energy source from waste management Strategic plan no. 2 the creation of competitiveness Strategic plan no. 5 the building of growth on environmental friendly quality of life

14 Life safety and waste management area Strategic plan no. 4 the creation of opportunity for social equality Strategic plan no. 5 the building of growth on environmental friendly quality of life

• KVIS/ VISTEC • Innovative products for quality of life and environment • Walking Robot to assist Paraplegics

• RDCC plant • Eco Industrial Zone • Protection Strip project

• Promotion of responsible plastic users • Love Rayong River project • Green Port (MARPOL)

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Major Corporation Social Responsibility Projects 2017 Environment

1 Lam Sai Yong Model Project Phase II

IRPC focused on contributing benefits to the community and society by applying the knowledge and potential of the organization and IRPC personnel. The IRPC Lam Sai Yong Model Project Phase I was initiated in 2014 with the cooperation from the Foundation for Education and Public Welfare to dredge 5 reservoirs at Nong Yang Village, Lam Sai Yong Subdistrict, Nang Rong District, Buriram province to be 4-meter deeper which was completed at the end of the year. The water can be increasingly stored by approximately 100,000 m3 or one double. This made the community be able to benefit from such reservoirs more from 350 households to 440 households. The community could earn more income from the sale of vegetable garden products at the average of 30,000 baht per year per household. In 2015 IRPC’s volunteers took part in repairing and improving the water supply system of Nong Yang Village which contain high concentrations of sediment as well as installing the wind turbine making water clear, clean, and standardized for consumption and use hygienically. The Project Phase II was started the operation in 2016. IRPC’s volunteer civil and electrical engineers did the field trip to survey and pipeline plastic PE pipes which

were the Company’s product from Lam Sai Yong connected to the reservoir at the size of 270,096 m3 dredged by the government in the distance of 1.2 kilometers. The solar-powered water pump was installed for the community not to be annoyed with the electricity charges. As a result, the communities could benefit the reserve water in the dry season increasingly from 3 to 10 communities throughout the Sub-district. The project was completed in January 2017. IRPC monitors the progress of the project continually. It was found that the project created the benefits to the communities absolutely. IRPC plans to use it as the model in other arid areas. In the year 2017, IRPC had been cooperated with the Governor of Sisaket Province in selecting the areas in Sisaket Province that were ready to be the area for implementing the Project Phase III which was expected to be completed in 2018. Such project will enable IRPC in summarizing the knowledge and budget management in the implementation of the droughtresilient program of the private sector following such model successfully. It will be publicized to the public or the community as a model to cooperate with private companies in solving the drought problem of the country.

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2 The Forest in Rayong Project “Phra Samut Chedi Mangrove Forest–the Unique Jewel of Rayong”

IRPC in collaboration with Rayong Provincial Administration and the public and private sectors launched the Forest in Rayong Project called “Phra Samut Chedi Mangrove Forest-the Unique Jewel of Rayong”, at Pak Nam and Tambon Noen Phra, Rayong, to develop the mangrove forest at the estuary of the Rayong River. The project is aimed to increase green areas accessible to the people for direct and indirect use as suits the areas. A total of 500 rais of mangrove forest was developed as a learning center, learning and recreation buildings constructed with a nature trail for mangrove forest ecosystem learning, community seedling nursery, two piers, and the Project Office. Residents in the areas can make use, directly and indirectly, of the mangrove forest to increase income, better lives, achieve economic and social quality, and prepare for the Eastern Economic Corridor (EEC).

3 Flood Problem Solution

In response to the communities’ concerns over the floods that happened during every rainy season, IRPC defined measures and formulated plans to prevent and solve the problem. The project (since 2016) included collection of waterborne weeds, canal dredging, and enlargement of waterways inside and outside the industrial zone. Water levels in the reservoir in the zone are lowered to accommodate up to 1 million cubic meters of water in case of heavy rain. Levels of rain water and water in the Rayong Reservoir will be regularly measured in cooperation with the Rayong Royal Irrigation Office for the opening and closing of the floodgate to release water flow to the sea to correspond to the retained water. IRPC also provided heavy machinery to develop the communities’ public areas, such as canal dredging and restoration for community use in Klong Bot, Klong Thue Rat in Ban Sak Lek and Ban Mab Song Salueng, Moo 4, Moo 5 and Moo 9, Tambon Bang But, Amphoe Ban Khai. Water retention areas were increased to reduce impacts from floods in the rainy season. This is another public facility project to benefit communities. Throughout the past 1 year, the communities were not affected by the flood problem in such areas.

4 Campaign in Promotion of Responsible Plastic Users

Tourism promotion under the “Waste to Revenue” theme IRPC in cooperation with University of the Thai Chamber of Commerce and Assumption College Rayong invited trios from secondary and vocational schools in Rayong and neighboring provinces to participate in a Short Film Production Training Project

Canal dredging to solve flood problem.

to promote Rayong tourism under the “Waste to Revenue” theme. Environmental Conservation Promotion/ Pattaya IRPC and the City of Pattaya joined in a project to support sustainable tourism activities in the 9th “Na Kluea – Walking and Food Tasting” to forge social and environmental responsibility awareness and campaign on “Being a Responsible Plastics User”. IRPC arranged training and education on “Safe use of Plastics” to entrepreneurs in the Na Kluea area,

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Health and quality of life activities to increase awareness of community participation in conserving environmental quality, provided public relations on using plastics in a responsible manner, arranged waste management and solids and plastics segregation activity based on the 3Rs principles (“Reduce Reuse and Recycle”).

5 Health Promotion Fund for Communities Surrounding IRPC Eco Industrial Zone

In 2016, IRPC set up a Health Promotion Fund for surrounding communities to provide health care services within a 5-km radius of IRPC Industrial Zone under the management of communities, and occupational health service provided by public health specialists. IRPC contributes 6 million baht to the fund every year. The fund brings about benefit in promotion, prevention, remedy and improved health of the residents surrounding the IRPC Industrial Zone. Progress report meetings are held every two months. 6 Prostheses Project Prostheses Project is the pride of IRPC in applying the polymer innovation which is IRPC’s product to be used as the raw material in making the prostheses for the Prostheses Foundation of HRH The Princess Mother in contribution to prosthesis production at the average of 20-25 tons per year in order to make the prostheses for the disabled people from all races and religions to resume to have better quality of life and to live happily in the society as same as healthy people. The project has been continually implemented since 2011. From 2011, 13,374 pieces of prostheses were produced for 11,487 patients from 115 tons of polymers. At the 2017 Annual General Meeting on April 4, 2017, at Centara Grand at Central World, IRPC invited the Prostheses Foundation to set up a booth displaying its activities with IRPC. Many shareholders visited the booth and donated 33,025 Baht to fund its activities. Furthermore, IRPC’s supported the volunteers under Repair, Rebuild, and Refill Happiness Project. Engineers and electronic and electrician staff attended the Mobile Prosthetic Service Unit (MPSU) to help install equipment and devices and produce prostheses for patients during December 1-3, 2017, at the Thailand Design Expo 2017, Impact Muang Thong Thani. The event served 46 patients, and 51 prostheses were made.

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7 Walking-Aid Robot for Paraplegics

IRPC signed in the MOU with Sirindhorn National Medical Rehabilitation Institute and Sripatum University in medical innovation development of "Walking-Aid Robot Development Project for Paraplegics". The project was developed by conducting research and development of medical equipment to help paraplegics lead a normal life and have better quality of life. IRPC and Sripatum University have been researching and developing ultra-high molecular weight polyethylene (UHMWPE), which is especially durable, highly resistant to impacts, shock absorption and corrosion, and light-weighted to reduce the weight for 10 kilograms from 25 kilograms. Hence, it can be used to replace the original parts of the walking-aid robots and help the disabled, the incompetent, or sick people by developing medical equipment of industrial scale for the benefit of society. 8 IRPC Give Never Stop IRPC together with FM.91 Trafficpro Radio Station launched "GIVE NEVER STOP Project Providing Life-Saving Equipmentâ&#x20AC;? to help the needy and the underprivileged so that they can lead a normal life with a better quality, as there is still a great need for medical devices or life support equipment. In 2017, in the period of 4 months (September 1-December 31, 2017), the project supported 310 needy and underprivileged persons.

9 Pan Nam Jai Clinic

IRPC established Pan Nam Jai Clinic (Community Sharing) in 2010 at IRPC Community Learning Center to provide free public health service and basic medical care to the communities surrounding IRPC Industrial Zone. In 2017 the clinic served 4,238 patients: with the total number of 8,848 IRPC Cards. Records and information on Pan Nam Jaiâ&#x20AC;&#x2122;s healthcare services will be forwarded to Rayong Hospital for its healthcare database system for treatment planning.

10 Mobile Clinic

Under cooperation with Queen Sirikit Hospital, Department of Naval Medical, IRPC arranged mobile clinical service to provide general medical care to those who are not able to travel to hospitals or the monthly Pan Nam Jai Clinic. In 2017, it served a total 1,735 patients living in the Tambon near IRPC Industrial Zone, namely Ban Laeng, Taphong, Na Takhwan, and in Choeng Noen and Nakorn Rayong Municipalities. 11 Project to Monitor the Wellness of People IRPC set up a geographic information system (GIS) database of the communities in the surrounding areas along the direction of the wind to identify the movement and dispersion of air pollution, based on

a mathematic model for air pollution, to be used in formulating work plans and measures to prevent, rectify and mitigate health impacts to the communities of 10,398 families (38,256 persons). Random sampling of 900 samples will be collected for three years, from 2015 to 2018. Air quality test results will be analyzed to formulate a healthcare surveillance plan for the communities around the industrial zone.

12 Drinking Water for Communities

IRPC distributed clean, standardized drinking water to the communities and government agencies surrounding IRPC Industrial Zone to enhance relation and support their public activities, such as religious events, training, meetings, cultural ceremonies, merit-making. IRPC gave out 211,392 cups and 24,864 bottles of drinking water in 2017. It is the pride for IRPC in bringing 500,000 bottles of IRPC water for community to serve the people attending the ceremony of Royal Cremation.

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Education 13 KVIS & VISTEC Project

IRPC joined with PTT Group to develop youth which was the excellent resource of the country in science and technology by establishing Kamnoetvidya Science Academy (KVIS). The name given by HRH Princess Maha Chakri Sirindhorn meant the "School of Science Learning". It is open for students in secondary school of 4th â&#x20AC;&#x201C; 6th year by providing education to talented students in science and math. The higher education institute was also given the name from HRH Princess Maha Chakri Sirindhorn as "Vidyasirimedhi Institute of Science and Technology (VISTEC) meaning the "Institute of the Great Science Educators" offering both masters and doctoral degrees in science. The two institutes are designed to meet the potential for full development setting the goal to become the "Leading research university" in creating excellent people and researchers with professional responsibility. It also promotes research and development in science and technology to build knowledge and to promote the competitiveness of science in Thailand. Both Kamnoetvidya Science Academy and Vidyasirimedhi Institute of Science and Technology are located on Highway No. 344, Km. 66, Pa Yub Nai Sub-district, Wang Chan District, Rayong Province.

14 IRPC CUBIC ACADEMY

Established in 2015, IRPC Cubic Academy is intended to create a sustainable learning institution and society with quality and ethical personnel. IRPC Cubic Academy developed six training courses with an emphasis on spurring business growth with sustainability. The training covers good governance, social contribution, communication, green business, promotion of good corporate image and sustainable business conduct, knowledge which IRPC can share. Participants consist of employees and external interested participants. These training courses are free of charge. The training is structured in the form of classroom lectures, exchange of opinions, workshops, and social responsibility activities. Course facilitators are knowledgeable people from within and outside IRPC. The four-month course, regularly held every Thursday during 13:00-17:00 hours at the IRPC Office, is opened for 100 participants. Since its establishment, the academy has held a total of five classes for 510 participants, 425 of whom are IRPC employees and 85 external interested participants.

Such project received Asia Responsible Entrepreneurship Awards (AREA Awards) in the Investment in People from Enterprise Asia, the independent organization in the promotion of responsibilities and sustainability of private organizations in Asia-Pacific region, and Golden Peacock Global Award for Corporate Social Responsibility 2017 from Institute of Directors, India, from being the organization with Corporate Social Responsibility using the resources available both inside and outside the organization efficiently.

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15 1 for 9 Project

IRPC, in cooperation with public organization Office for National Education Standards and Quality Assessment (ONESQA), has organized the “1 for 9” project since 2014, considered an innovation in academic development, according to IRPC’s intention to conduct business with social responsibility. The project has three objectives, namely development of academic quality and standards, development of educational system quality assurance by giving assistance to nine educational institutes to proceed in their quality development cycle, and application of IRPC’s competence and equipment into institute development. IRPC and participating schools jointly designed development in four aspects, namely academic essence knowledge, ethics promotion, students’ safety and occupational health, and schools’ role in community and environmental development. The latter aspect is considered part of the government’s project on “reducing classroom time, increasing study time”. “Enhance the Genius by Making a Robot”, implemented for students of Prathom 4-6 (grades 4-6) from Beacon House Yamsaard Lad Prao School. “Be Genius by Making a Robot” is an after-school club established to increase time and opportunity to learners to practice, to experience analytical thinking, to be able to work as a team and to self-learn happily. The activity also increases the learner’s potential in the

16 Scholarships for community

use of technology, basic knowledge in the digital era, creative inventions, skills for daily life, thinking and development of ideas in a wide scope and effective communication. The activity is learned by making a robot under the Raise Mechanic course designed by Raise Genius School, where learners will be practicing equipment, exercise imagination, analytical thinking and pass on their imagination in the 3D form. After completion, it is expected that learners will have basic knowledge in making robots and be able to create basic robots as well. The first semester of 2017 -Level 1 was run for 30 students every Wednesday between June 7 and September 27 from 14.20-5.30 hrs. Moreover, in 2017, IRPC also supported 3 youths in Rayong Province who had the potential in the invention and control of robot to attend the World Robot Olympiad 2017 (WRO2017) in San Jose, Costa Rica.

IRPC provides educational opportunities through the Scholarships for the Community Project. In 2017, 310 scholarships worth 2,118,000 Baht were given to 310 needy youths with good academic records and behavior who live around IRPC Industrial Zone. These students are from primary, secondary, vocational and university levels and were selected by leaders of 89 Rayong communities.

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Religion, art, and culture

17 IRPC project to conserve culture

• Seafaring Buddhist Robe Offering Being aware of the importance in conserving the local tradition, culture, and religion maintaining, IRPC in cooperation with held a “Seafaring Buddhist Robe Offering” (September 2, 2017) ceremony, initiated by the fishing communities in Moo 1, Tambon Hat Sai Ri, Amphoe Mueang, Chumphon, to conserve the near-extinct Thai cultural tradition. A procession of 40 fishing boats brought Buddhist robes to present to monks at Wat Phlap Phla, near IRPC’s Chumphon Oil Depot. The fund raised in the event was used for restoration of the crematorium of Wat Phlap Phla, purchase of safety boats, purchase of medical equipment, etc. In addition, IRPC and Chumphon Culture Office organized the “IRPC loves Southern Sea and Arts” event to preserve the cultural tradition of southern Thailand. Activities included a local food set contest, sport competition, sea boxing, shadow puppet theater, shadow puppet play, and Manora dance. The event was honored by Khun Narong Phollaait, the Governor of Chumphon, to preside. This event also encouraged all relevant parties to be aware of the importance of the value of cultural heritage of the community in order to preserve sustainably. • Kathin Samakkee 2017 IRPC arranged a Krathin Samakkee ceremony annually for the temples in the area surrounding IRPC Industrial Zone to promote and conserve the Thai culture together with communities, government and

private sectors. In 2017, IRPC hosted this ceremony at three temples and co-hosted at eight temples, using a total budget of 2.5 million Baht. Moreover, in the lent ceremony, there is the continual practical tradition for IRPC to give the candles to 9 temples located around the IRPC operating zone.

18 Thai Shadow Puppet Theater (Nang Yai), Wat Ban Don

IRPC joined in the conservation of this Thai cultural tradition, which is over 200 years old. The Nang Yai is a high-art performance which includes five invaluable arts: handicraft, dancing, music, rhetoric and literature. IRPC provided budget to cover operating costs for two screens for the shows, costumes, foods and encouraged youths who are interested in folk arts to learn this puppetry arts to make them proud and appreciate their local arts, which will lead to further development and elevate it to national and international levels.

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• Amazing Songkran IRPC and the Tourism Authority of Thailand (TAT) joined in the “Amazing Songkran 2017” event during April 8–13, 2017, to promote cultural tourism and Thai Songkran tradition among Thai and foreign tourists. IRPC is the only company from the private sector to jointly organize the event and lead an Electric Float Parade under the "IRPC Green Songkran" concept by using IRPC’s green plastic products to decorate the float with a procession of actors as representation of environmental conservation.

Social development 19 Occupation and Employment Promotion for the Disabled

IRPC is one the private sertors that recognized the ability of the disabled by help creating jobs order for them to be self-reluance with stable income to support themselves and their families, live with dignity, and enjoy a better quality of life. Apart from hiring 5 disabled employees, In 2017, IRPC held two projects to support the disabled as follows; the Drinking Water Project: 20 positions opened for the disabled through The Innovation for Society at Tambon Waloei, Amphoe Phop Phra, Tak, at an average of 109,500 Baht per person per year, or a total of 2,190,000 Baht, the Redemptorists Foundation for PWDs” with Sufficiency Economy Project, aiming to provide occupational training for the disbled so that they may be able to work in positions and an environment suitable for them. IRPC supported such training for 26 disabled at an average 109,500 Baht per person per year, or a total of 2,847,000 Baht. In addition, the operation has been implemented more than as prescribed by law by supporting the Smile Farm for Chance project to the disabled in the care of the Redemptorists Foundation. This can further the agricultural market in accordance with the sufficiency economy to increase family income and improve quality of life.

20 Promotion of community enterprise

IRPC values the quality of life of residents in the communities around IRPC Industrial Zone and has promoted model groups of community enterprise since 2007 through enhancement of potential and skills, development of knowledge in product processing, packaging and standards, pursuit of sales channels for community products. IRPC supports 40 community enterprise model groups to strengthen their business and become self-sustaining, which generated an income of Baht 300,000 per group. IRPC also employs the communities’ services and engages in product procurement from the communities In 2017, this procurement accounted for Baht 296 million.

21 Public Facilities

In response to the communities’ needs, IRPC implemented projects beneficial to the surrounding communities, In 2017, IRPC constructed public facilities for the most benefit of communities such as projects to support thermal foggers, improvement of the landscape, a granular fertilizer plant, monasteries, exercise yards and a community occupational promotion center, installation of lights and lighting for public paths, and construction of a multi-purpose building, Civil Defense Volunteer Center, stands for the football stadium and village guardhouses.

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22 Volunteers’ Hearts for Community Development

IRPC encourages its employees to use their potential and knowledge in the activities of the Company as well as the communities for the development of the communities surrounding IRPC Industrial Zone. The activities included improvement of buildings and the community tap water system. Our volunteers also held Thai language and basic English courses for the elderly at Nongjok Convent. The project aims to benefit communities, raise public awareness among employees, create cooperation networks, and cultivate CSR DNA. In 2017 a total of 1,859 employees joined the activities with 17,447 hours spent.

23 IRPC Community Network Learning Center

IRPC Community Network Learning Center was established to be a learning center, promote and develop environmental matters and enhance communities’ occupations and economy as well as a platform to strengthen relations between members in the communities, community and community, and communities and IRPC. The center offered various learning through its clubs: cooking, bakery, sewing (quilt art), yoga, dancing, science, English, mental arithmetic, Taekwondo, and so on. In 2017, about 11,065 people joined the activities during Saturdays and Sundays. There is also the Open House annual event to arrange the topic of seminar on the environmental management in the operational zone. The stakeholders were led to the factory to have public relations on the information with stakeholders around the operational

zone with various channels such as newsletters, videos, CSR Story, brochures and press releases via radio and cable TV to disseminate to all sectors about the operations of IRPC continually.

24 School for the Elderly, Amphoe Mueang Rayong

The school represents another model for promoting lifelong learning, educational management, and development of the elderly’s life quality. IRPC improved the course structure following those of other elderly schools. The courses and learning activities were designed to suit the elderly in the communities and useful to their living, enhance their knowledge and skills, both physically and mentally, to make them happy in these activities together. The knowledge gained will also be useful to their occupation and in generating income to benefit themselves, their families and society. The school had 128 students and held 13 learning activities this year, which included happy recreation, and self-treatment through Thai traditional medical knowledge, and a trip to Song Salueng Agri-Nature at Amphoe Klang on self-sufficiency.

Social Return On Investment (SROI)

The Company has prepared an evaluation of social contribution illustrating “result” or “value” derived from social activities in reviewing past projects and to systematically employ such information in procedure and strategic planning in the future. Selection of projects to be evaluated will take into account projects with high investment rate, high social impact and high outcome for the organization. Two projects evaluated in 2017 were: Prostheses project with 1 baht of investment and 6.66 baht social return. Lam Sai Yong Model project with 1 baht of investment and 47.05 baht of social return.

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Major Corporation Social Responsibility Projects 2017

Investment in social enterprise

At present, the government has supported and developed the social enterprise by establishing the Thai Social Enterprise Office (TSEO) which is responsible for supporting, promoting, and coordinating for social enterprise developed as the social network of Thailand as well as responding to economic, social, cultural and environmental problems to be defined as "Social Enterprise". It is the business that primarily aims at solving social and environmental problems using good management mechanism of business sector combined with knowledge and social innovation in order to have financial sustainability from the main income derived from goods or services without the dependence on the donations. The profits will be reinvested to expand the social impact. This is in line with national strategic framework for equal opportunity and social difference including benefiting for the growth on an environmentally friendly quality of life. In order to promote government policy and elevate the support in Corporate Social Responsibility (CSR) to social enterprise (Social Enterprise) for seeking the self-reliant investment with the community participation and ownership, the operation is in line with the approach to drive the organization towards sustainable development goals (SDG). IRPC Public Company Limited is committed to support social enterprises seriously in terms of budget, management, and setting of international excellence. This is another way to return to society which will be beneficial for the nation widely and will promote the progress of

youth and Thai society in the future. In 2017, IRPC promoted the social enterprise as follows: 1. IRPC and PTT Group have cooperatively established Sarn Palung Social Enterprise Co., Ltd. (SPSE) since PTT Group has organized various social activities in the form of Corporate Social Responsibility (CSR); therefore, the Company can select and search for social activity projects capable of sustainable business operation that, in turn, will yield higher benefits, employment opportunity or problem-solving in the community. Such joint ventures consist of PTT with 20 percent share, PTTEP, PTTGC, Thaioil and IRPC with 15 percent share and GPSC and PTTOR with 10 percent share each. The first project is CafĂŠ Amazon project for underprivileged in which the budget will be derived from PTTâ&#x20AC;&#x2122;s donation. IRPC also plans to set up the learning center of alternative energy at IRPC Technological College (IRPCT) to become a social enterprise. 2. IRPC has strongly supported SocialGiver, a social enterprise, start up category, employing innovation and technology as a business platform to connect with service business sector, consumers and social projects for sustainable growth and development. From June 2017, Social Giver can support 5 more foundations (from 20 to 25) and launch campaigns to raise money for various foundations upto 2 million baht. 3. IRPC Technological College (IRPCT) IRPC Technological College (IRPCT) is the vocational institute with 99.9% of the investment by

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2017 Annual Report IRPC Public Company Limited

IRPC. The objective of establishment is to build the community college to respond to the needs of Rayong people in having the educational institute that produces skilled labor in the industrial sector of the country. As Rayong is the area with a lot of industrial factories, a lot of skilled workers are needed. IRPCT under the Vocational Education Commission provides the Vocational Certificate Program and Higher Vocational Certificate Program from 1st June,

IRPC 4.0 : KEY MAP

TRAINING CENTER FOR HIGH SKILL OPERATOR & COLLEGE

WAYS INTEGRATED LERANING MODEL OF RENEWABLE ENERGY VOCATIONAL QUALITY LIFT UP

IRPCT 4.0

• I-VOT (IRPCT VOCATIONAL & OPERATOR TRAINING CENTER)

• I-REC (IRPCT RENEWABLE ENERGY LEARNING CENTER)

• I-EMS (IRPCT EXCELLENT MODEL SCHOOL)

1995, under the policy support from IRPC Public Company Limited. The School-factory teaching style is developed with the aim to provide the graduates with the quality to meet the needs of the establishments of Rayong. There are more than 7,000 graduates working in the workplaces. Apart from Thai students, since 2013 and onwards, the College has provided the education both Thai and English Program to enhance the vocational education of neighboring country having Myanmar student in the MERIT project sponsored by PTT Public Company Limited. There are also the students in the Vocational Education Scholarship Project of HRH Princess Maha Chakri Sirindhorn providing assistance in elevating the education for vocational teachers in the Lao People's Democratic Republic and the students from Cambodia and Vietnam going to cooperate in the future. There are 107 foreign students studying at the College. In addition, IRPCT has provided the Train the Trainer program which is the development of teachers from the Lao People's Democratic Republic and Myanmar in the learning styles in electrical power engineering and electronics in order to bring such knowledge and experience back to develop the teaching system in both countries.

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Major Corporation Social Responsibility Projects 2017

In 2017, IRPCT has adjusted the strategic plan to agree with the policy of Thailand 4.0, Eastern Economic Corridor (EEC) promoting the investment in the New S Curve industry including the policy of IRPC 4.0 in developing the efficiency of work with the assistance from digital system. There are 3 main mission as follows: 1. IRPCT – Excellent Model School (i-EMS) to elevate the education quality towards Asia Pacific standard by adjusting the curriculum to English Program and Mini English Program, applying information technology (e-College) and other tools in preparing Smart Learning Model (SLeM) 2. IRPCT – Renewable Energy Learning Center (i-REC) is the development on the Learning center of alternative energy as the model in learning for energy technic as well as being the learning source for students and university students from other communities under 4 Co generators Smart Grid system. 3. IRPCT – Vocational Operator Training Center (i-VOT) is the education to develop the project of training center for the operators and technicians for PTT group, vocational education institutes and operational places to respond to EEC. Apart from being the leading vocational institute

in the East, IRPCT has also opened an IRPC Technology Services Center to provide training courses that meet labor standards and management courses such as Safety Officer Course, Safety at work in confined area, including providing the venue for training and conferences. In 2017, IRPCT succeeded in teaching, management, Good Governance, professional skills, innovation, invention and Technology as well as receiving numerous accolades and awards, for example: • Being accredited to be the member of Collective Action Coalition project of Thailand’s Private Sector Collective Action Coalition Against Corruption (CAC) • The 5th runner-up in the WRO 2017: World Robot Olympiad 2017 in the age of not over 19 years from 7-10 September, 2017, in Republic of Costa Rica, North America. • Awards in the innovation and invention such as the winner in the Olympic Robot Competition, the first runner-up in the project of Go Further Innovator Scholarship 2017, the second runner-up in the competition of economic car. Throughout the past 20 years, IRPC has continued to strive to develop quality vocational education to enforce Thailand 4.0 further.

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Operation Plan of New and Significant Social Responsibility Projects 2018

In 2018, IRPC plans to implement CSR projects that foster balance of impact between society, community and the Company. Apart from the shareholders, the Company endeavors to encourage involvement of stakeholders while considering ideas, requirements and recommendations of stakeholders more inclusively to identify precise direction that ultimately creates value to its stakeholders.

Social Responsibility Project of 2018 are as Follows:

• Love Rayong River Project

IRPC, together with Thammasat University, Rayong community and Marine Office, Rayong branch organized “Love Rayong River” project as a starting point to solve problems and waste reduction in the country’s water source by encouraging youth, students, private sector and local agency to acknowledge waste problem leading to water pollution. The Company also encourages people’s involvement in inspecting, monitoring and realizing the importance of conservation of water source in Rayong province. “Love Rayong River” project will be held on April 2018. During this event, 40 canoes will start from Kod Po Public Park to Chalerm Phra Kiat View Tower for the total of 2 kilometers to collect garbage in the river while instilling awareness and involvement in solving water source problem. Such

• IRPC Cubic Academy for SME & Student Project

• Mobile Car Clinic for Prosthesis Project

travel route will commence from the headwater of Rayong River down to its final destination at IRPC view tower, the last mangrove forest left standing and cherished as a precious jewel of Rayong.

• Lam Sai Yong Model Project Phase III, Srisaket province • Learning center of alternative energy at IRPC Technological College (IRPCT) • Plastic Use with Responsibility Campaign Project

• Wat Krua Ta Petch Learning Center Project

• IRPC “Friend for Farmers” Project

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Quality, Safety, Occupational Health and Environment Management (QSHE)

Quality, Safety, Occupational Health and Environment Management (QSHE) IRPC Public Company Limited (IRPC) is committed to excellence and sustainable growth by taking into consideration the quality, safety, occupational health and environment (QSHE) in accordance with international standards and best practices under the umbrella of IRPC's Operational Excellence Management System. With a common goal to add value to the organization and all stakeholders, IRPC has implemented its QSHE policy, programs and activities. The major achievements of year 2017 are summarized as follows.

Quality IRPC has adapted and implemented quality control measures such as Quality Control Circle (QCC) and Total Productive Maintenance and Management (TPM) to increase employee productivity at the operational level and support the implementation of plant reliability by integrating QCC and TPM into IRPC’s Operational Excellence Management System in order to manage the value chain of safety and environmental considerations to meet all stakeholders’ satisfaction. IRPC Company Limited started its Total Productive Maintenance & Management (TPM) to move forward to achieve its goals in 3 major criteria; namely, zero accident, zero machine breakdown and zero defect by starting from its facilities of oil refinery, basic lubricant plant and petroleum tank farm since the end of 2011 under the management of 8 major pillars consisting of: • Focus improvement • Autonomous maintenance • Planned maintenance • Safety health environment • Education and training • Quality maintenance • Early management • Office improvement In 2016, IRPC has been granted with TPM Excellence Award from JIPM (Japan Institute of Plant Maintenance), Japan from its pilot project at the facilities of oil refinery, basic lubricant plant and petroleum tank farm. IRPC has consistently operated the TPM system while simultaneously expanding its operation to every plant under petrochemical and oil

The management presents a “Goal Zero Accident” banner to departments as the common goal

refinery industry. In December 2016, IRPC’s performance had been re-evaluated based on the criteria of TPM award. As a result of its efficient operation and constant development, coupled with successful performance results, IRCP; therefore, had been awarded as follows: • Oil refinery, basic lubricant plant and petroleum tank farm had received TPM Consistency Award (TPM part 2) • Olefins and arometics plants and petrochemical tank farm had been granted with TPM Excellence Award (TPM part 1) These two awards presentation had been held in Kyoto, Japan on March 11, 2018. Safety and Occupational Health Safety and Occupational Health is IRPC’s top priority in all processes including personal safety, process safety and transport safety which may affect employees, contractors, communities as well as

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In addition, the program encourages self-development among all employees to become leaders in safety, train employees to work in teams, and help/ warn each other so that accident is minimized. IRPC values road safety. It organized a “Safe Driving Campaign" to develop and instill awareness of road safety for employees and contractors in the IRPC Industrial Zone. Every The management presents a “Goal Zero Accident” banner to departments as the morning before work and evening common goal after work, the campaign emphasizes and communicates the need for motorcyclists to wear stakeholders. With the combination of SSHE into helmets and drivers to buckle up seatbelts. According OEMS and adherence to international safety to the results of the survey, employees and contractors standards, IRPC aims to become a safe, secure and collaborated and followed the safe road instructions. environmentally responsible organization with IRPC is aware of the importance of employees’ zero-accident and zero emergency. IRPC promotes health. Based on the Body Mass Index (BMI), members safety awareness and culture among all employees of the workforce are likely to become obese. Therefore, and contractors. There are many projects and activities IRPC has implemented a "Good Health Starts Here" implemented, for example, "GOAL ZERO", "Safety program to help the workforce keep the body fit for Excellence", “Safe Driving Program” and "Good their day-to-day work. The program provided Health Starts Here". employees who exceed BMI standard with training IRPC developed and implemented five-year plan on nutrition. IRPC also promoted healthy food by covering personal safety, process safety and offering a free healthy lunch, green vegetables, occupational health that aims to bring a safe and healthy workplace organization without work-related injuries and emergency incidents. The management has focused on raising the awareness of safety and occupational health. Since June 2, 2016, IRPC has implemented the "GOAL ZERO" project to encourage all employees in all areas to think about safety first. All employees must follow the operating procedures and safety requirements without taking a short cut or rush, assess job risks, and prevent safety risks. IRPC organizes an IRPC QSHE Day every year to promote safety awareness, occupational health, environment, energy conservation and productivity. Awards are presented to the department or team who exemplifies safe working. Employee participation in the "Safety Excellence" program is a strategy to encourage changes in at-risk behavior in all dimensions, Road safety campaign promotion in the IRPC Industrial Zone comply with safety rules and standards, and motivate the workforce to have a safety sense at all times.

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Quality, Safety, Occupational Health and Environment Management (QSHE)

healthy refreshment and herbal drinks during business meeting. A program named “Let’s Exercise” has been implemented to promote the workforce’s exercise to stay fit and healthy. • Process Safety Management IRPC implemented Process Safety Management as an integral part of its Security Safety, Occupational Health and Safety Management and Environment under the Operational Excellence Management System (OEMS) in compliance with OSHA (Occupational Safety and Health Administration) standards. The management at all levels have demonstrated their leadership in safety and continually communicate IRPC’s commitment to workforce. The President led senior management on a visit to the work site during the major maintenance turnaround this year. They also visited the Rayong facilities and oil depots. Leadership visits have improved the workforce’s morale and demonstrated commitment to safety of the entire production processes. The commitment includes the development of e-MoC programs to support the management of change and the Incident Management System (IDMS) as a center for managing all incidents. By setting safety as one of their performance indicators, using participatory approach among work teams forges confidence among the workforce to control and prevent safety incidents.

Workforce participation in the “Let’s Exercise” program

IRPC paid a special attention to safety during the major maintenance this year. It organized the “Safety Management in 2017 Major Maintenance” to establish goals in working with contractors, conduct emergency drills and rescue drills, train safety officers of contractors, prepare manuals and media for Safety Talk and Tool Box Meeting prior to commencement of work, as well as establishing turnaround coordination centers and safety audits in each area. As a result, incident cases declined without serious accidents from that of last major maintenance in 2011.

Response measures to minimize the impact during Major Turnaround 2017

IRPC set up an evaluation of impact on environment such as odour, noise and dirt while specifying different preventive measures to minimize and rectify potential impacts. 1. IRPC evaluated the impact on environment such as odour, noise and dirt as well as defining necessary preventive measures to rectify potential impacts. 2. IRPC managed the problem of air pollution by measuring air quality in its facilities and the communities nearby. 3. IRPC managed waste by separating waste and garbage, starting from its source while residues

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resulting from the Major Turnaround had been sent to responsible agencies certified by the Department of Industrial Works for elimination in which IRPC had closely monitored and followed up the transportation of such residues. 4. Wastewater management can be classified into 2 types as follows: 4.1 Wastewater from cleaning process and system preparation which will be transported for further elimination by agency permitted by the Department of Industrial Works. 4.2 Other wastewater will be transported to IRPC’s wastewater treatment system to have the same standard as specified by the Department of Industrial Works. 5. IRPC handled the pr oblem of noise pollution by regularly measuring noise level in the community during Major Turnaround activity. 6. IRPC managed the traffic problem by arranging in-out time of contractors as well as cooperating with the traffic police to facilitate the traffic system, 7. IRPC strived to control chemical spill and leakage as well as inspecting any leakage of materials, equipment and utensils employed in containing waste to prevent toxic vapour emission to the atmosphere. In addition, vapour traps have been installed at the operation site. 8. Employees and contractors must strictly comply to every measure as specified in the safety handbook

9. News report and communication with the public sector, including local agency, community, Rayong’s press shall be performed on a regular basis. 10. IRPC specified measures to minimize the impact in every activity such as field coordination center with team members to monitor risk-prone areas 24-hour a day as well as arranging the medical team to operate around the facilities. Remarks: Communities around IRPC’s facilities were estimated at 71,500 families with the total of 130 Environment

Environment IRPC recognizes its environmental responsibility by employing strategies for managing natural resources effectively, utilizing water resources for maximum efficiency and preventing impacts on the environment. IRPC has improved processes to become more environmentally friendly. It promoted the use of clean energy and the 3 Rs principle (Reduce, Reuse, Recycle) in the management of air, water and waste. This year the Green Turnaround Program has been implemented in all aspects, including safety, environment, and community care. This year, IRPC’s factories were certified as Eco Factories based on the Industrial Ecological Framework of the Industrial Environmental Institute of the Federation of Thai Industries. Good environmental management is one of the reasons why the company has maintained membership of the Dow Jones Sustainability Indices (DJSI) for a fourth consecutive year.

Absorb about 3,600 tons of carbon dioxide per year

Safety Management in 2017 Major Maintenance

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PROTECTION STRIP Tambon Choeng Nern

UHV Project

â&#x20AC;˘ Pollutant Release and Transfer Registers (PRTRs) for the Department of Industrial Works, Ministry of Industry IRPC has participated in a pilot project to produce a PRTR report, a voluntary program organized by the cooperation between the Department of Industrial Works, Ministry of Industry, and Japan International Cooperation Agency (JICA). This program established a database containing information on industries in Rayong and their release or transfer of pollutants to the air, water and soil. Since 2012 under the cooperation with PTT Group, IRPC has reported PRTR findings under the petroleum and petrochemical group via electronic channels to the Department of Industrial Works. It has consistently improved chemical usage efficiency in parallel with raw-material and chemical loss prevention and implemented measures to reduce pollutants released to the environment. Reducing Greenhouse Gas (GHG) Emissions IRPC is committed to GHG emission reduction in alignment with Thailandâ&#x20AC;&#x2122;s commitment to the 21st United Nations Framework Convention on Climate Change (COP21). In 2015, IRPC determined its direction to improve energy efficiency in parallel with

the reduction of GHG emissions. Its carbon footprint was certified by Thailand Greenhouse Gas Management Organization (Public Organization). It enables IRPC to identify sources of emission, assess the quantity of GHG emissions and identify improvement opportunities for efficient emission reduction. It has

Reduce Voes by 60 tons per year

implemented a waste gas management project, heavy-oil quality improvement from distillation tower (UHV) project, a refractory brick coating furnace in the combustion chamber project, and reduction of heat loss at the cooling tower of the Ethylene Plant (ETP) project. As a result, this year IRPC was able to reduce GHG emissions by maximizing energy efficiency by 132,856 tons of carbon dioxide equivalent (calculated from January to September 2017).

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2017 Annual Report IRPC Public Company Limited

• Reforestation around IRPC’s Industrial Zone (Protection Strip) IRPC has continued planting a natural protection strip since the beginning of this project in 2011. This year, 18 additional rai of 5,242 trees was completed. Since the beginning of the project, 707 rai of 383,362 trees have absorbed about 3,600 tons of carbon dioxide per year. The 707 rai of the protection strip area accounts for 12.41% of the total industrial zone area, or roughly 5,695.82 rai. It is larger than the original plan, designed at 692.42 rai. The implementation of the Protection Strip Project reduces air emission impacts, particulates and noise on the community around the site. It also adds a green landscape and reduces GHG emissions directly. • Management of Volatile Organic Compounds (VOCs) IRPC has managed Volatile Organic Compounds (VOCs) to prevent impacts on the environment and communities. Control, mitigation and monitoring plans are in place. It plans to install ambient air quality monitoring stations. Also, VOCs cameras and online monitoring has been implemented this year. IRPC has spent Baht 80 million on installing the second Vapor Recovery Unit (VRU) to control VOCs from the chemical tanks of the Ethylene Plant, the Benzene, Toluene and Xylene Plant and vaporizing control systems from the tank farm. It is expected that IRPC can reduce

Vapor Recovery Unit II

VOCs by more than 60 tons a year. • Emission Control and Air Quality Improvement Program IRPC has invested funds to limit sulfur dioxide (SO2), nitrogen oxides (NOx) and total suspended particles (TSPs) in air emission. Their quantities have clearly been plummeting over five years during 2012-2017 due to the use of fuels and the installation of clean combustion equipment. TGTU and CHP projects slashed sulfur dioxide and particulates from emissions. The overall reduction of both sulfur dioxide and nitrogen dioxide is more than 1,280 tons a year compared to that of before improvement.

Reduce NOx more than

1,280

tons per year

The second Vapor Recovery Unit (VRU)

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Quality, Safety, Occupational Health and Environment Management (QSHE)

GRAPH ILLUSTRATING EXAMPLE OF METEOROLOGICAL CENTER IN COMMUNITY AREA REPLACE THE CONSUMPTION BY USING MIXED GAS 4 MILLION BAHT MINIMIZE THE CONSUMPTION OF FUEL OIL AT THE AVERAGE OF 68,000 TONS/ YEAR

PPB 200 180 160 140

AVERAGE VALUE FOR 24 HOURS

VALUE

120 1OO 80 60 40 20 0

01/01/2008 01/01/2009 01/01/2010 01/01/2011 01/01/2012 01/01/2013 01/01/2014 01/01/2015 01/01/2016 01/01/2017 DATE & TIME

2008

PLUAK KADE TEMPLE

2009

2010

IRPC TECHNOLOGY INSTITUTE

2011

2012

IRPC’S EMPLOYEE HOUSING

2013

2014

2015

BAAN KON NONG HOSPITAL

2016

2017

BAAN LANG SUBDISTRICT ADMINISTRATION ORGANIZATION

ที่มา: ส วนบร�หารจัดการสิ�งแวดล อม บร�ษัท ไออาร พ�ซี จำกัด (มหาชน)

Source: IRPC's Environmental Management Division

• Ecological industry development (Eco-Industrial Zone) IRPC is committed to the development of ecoindustrial zones based on a five-year strategic development plan (2012-2020), a model for the development of the eco-industry. IRPC has implemented the 3Rs (Reduce Reuse Recycle) approach, focusing on waste reduction at sources, reuse and recycling. Many projects were carried out to improve processes, including waste disposal. As a result, the quantity of hazardous waste disposed to landfill was reduced to only 1% of the total amount generated. It plans to steadily reduce the quantity of hazardous waste to landfill to zero by 2020. This year IRPC has continued its Eco Factory and Eco Factory certification efforts. There were nine more plants certified, namely Expandable Polystyrene (EPS) plant, ABS and AS polymer and powder Plant, Plastic Compounding Plant, Wastewater Treatment Plants 1, 2 and 3, PTK Catalyst Plant, Ethylbenzene Styrene Monomer Plant, HA1 Catalyst Plant, and Water Supply Plant. This achievement completed the

Eco Factory certification of all 24 IRPC’s plants. The management of IRPC industrial facilities have dedicated in developing its ability to gain management excellence in 4 major perspectives as indicated below: EIZ Data Base Intelligent (in terms of information management perspective) serving as an information center for the facilities that provide an up-to-date information and setting up Enterprise Data Base such as plant’s environmental information (for Non-IRPC plants) in which the user will have an easy access to information via the intranet. EIZ Emergency Integrated (in terms of emergency response perspective) The management of IRPC industrial facilities has sufficient capability to respond and cope with every emergency situation, with well-equipped appliances and personnel as well as the cooperative network in local, national and international levels. In 2017, IRPC had joined force with Thai Army, related government and private agencies in practicing to be well-prepared in case of any natural disasters take place. IRPC also exchanges

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practice to adjust the standard and integrate the plans by simulating chemical leakage situation, considered severe enough to coordinate with relevant public agencies and Thai Army for their quick response and assistance. The duration of such practice took place between 21-23 June, 2017. IRPC also established Safe Fire Project learning center, initiated by the executives with the main purpose to provide training program in terms of fire extinguishing and emergency rescue mission so that employees will possess skills and expertise in effectively responding to emergency situations which in turn help IRPC minimize training costs. Afterwards, many outside customers and interested persons had attended IRPC’s training programs in which last year15 people had participated in the training at IRPC’s training center. EIZ Accountability (in terms of supervision of facilities perspective) IRPC monitored and encouraged cooperation between its facilities and Non-IRPC industrial group by setting up service center and providing advice to relevant persons while offensively communicating information to ensure the stakeholders’ confidence of IRPC’s business operation.

In 2017, IRPC marked its success in many cooperative activities such as public utilities preparation plan and manufacturing support of Non-IRPC group (Turnaround 2017) and contractors. Coordination and communication in support of Turnaround 2017 had been successfully implemented with satisfactory performance results and complaint handling with CRM as a major tool in responding to Non-IRPC customers’ complaint in which every complaint could be solved in a timely manner. In addition, IRPC had communicated with its plants as well as Non-IRPC plants in the area of eco-industry via the company’s intranet, e-mail and line group. EIZ Utility Reliability (in terms of public utilities and public assistance perspective) The area surrounding IRPC’s facilities are well-equipped with stable, sufficient public utilities and public assistance that respond to the requirement of various plants within its facilities. In 2017, IRPC had provided additional lights along the street to prevent traffic accident in accordance with its policy of “Goal Zero” which encompasses safety of life and property of every concerned individual in its facilities.

213

IRPC’s Sustainability Management Structure

IRPC arranges for its organization structure with a “Sustainability Management Office” under the President’s direct supervision. Its role consists in the management of corporate sustainability strategies. IRPC Group’s “Sustainable Business Operation Committee” consists of the Executive Vice President, Sustainability Management Office, as Chairman, supported by top executives from units supervising economic, social, environmental, and corporate governance, jointly formulating sustainability policies and strategies, screening and advising on sustainable business plans for the approval of the Management Committee and the Board of Directors; supervising, monitoring, supporting, and promoting sustainable operation in line with the policies and strategies for a corporation of excellence and sustainability according to the vision of ”Leading Integrated Petrochemical Complex in Asia by 2020”

Target of Sustainability Management

Accomplishments

DJSI’s leader of Oil and Gas Refining and Marketing Group

Selected membership of the DJSI Emerging Market, Oil and Gas Refining and Marketing Group for the fourth consecutive year, and presented with a 2018 RobecoSAM Silver Class Award

Disseminate information on sustainability to the public

Sustainability Report Award 2017 (Excellence Level) from the Sustainability Report Award announcement, a cooperative project of CSR Club, Thai Listed Companies Association, SEC, and Thaipat Institute with the award level being more developed that that of the previous year

Becoming an Eco-Industrial Zone

IRPC’s 24 plants were certified Eco-Factories by the Industrial Environmental Institute, Federation of Thai Industries

Raising awareness that has impact on sustainable operation behavior

• Foster desirable behavior (IRPC DNA) • Forge knowledge and understanding of sustainability management for target employees and mid-level executives

Business Shift with Digital Mindset

• Strategies of Power of Digital • Operation via digital system

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2017 Annual Report IRPC Public Company Limited

Co-Creation

Stakeholders’ Engagement

Multi-level Engagement

IRPC recognizes stakeholders’ increased expectations of its role in business operations to move toward the future with security and sustainability. To this end, between October 2016-October 2017, IRPC arranged to receive opinions from five groups of stakeholders, namely employees, government agencies, community leaders, business partners, and customers through in-depth interviews in order to understand perspectives, expectations, and foster good relationship with stakeholders whose role is crucial to IRPC’s success. Opinions received from all dimensions and true understanding of stakeholders’ perspectives will be beneficial in terms of information for Materiality Assessment in order to formulate IRPC’s strategies and modify them to meet the ever-changing environment. IRPC received useful comments from stakeholders. For example, the development of innovation was

Deep Engagement

crucial to its future business operations, as well as product development, and business expansion to new markets. IRPC’s Educational Projects contributed to the robust development of communities and supported the public sector in mobilizing the country. IRPC’s communication consisted of strategies and guidelines for sustainable development. Value was placed on human resource development. Confidence was created that IRPC’s processes constantly reduced environmental impacts. Management of land use in the industrial zone was efficient. For the e-bidding, there should be assessment covering environmental, social, corporate governance dimensions, among others.

SD Academy Project

IRPC has formulated an HR development plan to provide concept framework of sustainability management to IRPC’s employees. In 2016, the Sustainability

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IRPC’s Sustainability Management Structure

1. “Formulate idea framework to achieve sustainability”

4.“What is it to enhance IRPC’s growth?”

2. “Plan life to achieve sustainable business”

5. “Eliminate risk and prioritize issues”

3. “Who are they? “Stakeholders” Who will win? Who will lose?”

6. “Answer society’s questions with SROI”

How does CSR make IRPC sustainable? New trend of sustainable investment that listed companies must pay attention to.

Do you know that for the Company to operate sustainable business, all functions must take part and complement one another in the formulation of sustainable strategies?

How to design CSR to tackle the needs of stakeholders and foster sustainability for IRPC and expand the opportunity of success for IRPC’s business

Learn risk management and identify critical issues related to IRPC’s sustainability, including management and prioritization

How do acquaintances, good relationship, and cooperation with stakeholders play important roles in IRPC’s business growth and sustainability?

How to pinpoint actual key success indicators of the project that we operate and participate in the analysis of returns on investment

Management Office started to provide such knowledge to the management from vice presidents or equivalent upward, continuing on to section and department chiefs in 2017 through the SD Academy Project, a workshop on sustainability consisting of six courses. The objectives of the project were as follows: 1. First-line to mid-level executives and interested persons acquire knowledge and understanding of the importance of CSR and sustainability development, formulation of sustainable strategies, importance of stakeholders in IRPC’s businesses, design of activities/ procedures of network of cooperation on

sustainability development, assessment of the importance of risks, prioritization of issues, and understanding of the principle of Social Return on Investment (SROI) 2. First-line to mid-level executives and interested persons integrate knowledge on the responsibilities toward communities, society, and the environment, as well as sustainability development to IRPC’s business management 3. First-line to mid-level executives are acquainted with their supporting roles and duties to drive IRPC toward a sustainable corporation.

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Corporate Governance Report of Thai Listed Companies (CGR) 2017 No.

Criteria

Information Sources Rights of Shareholders

Does the Company offer other ownership rights beyond voting? IRPC: Yes. The rights to propose meeting agenda in advance of the meeting, nominate candidates for directorship, appoint or dismiss director, consider the remuneration of the director and auditor, consider the profit sprit/ dividend, access sufficient, up- to- date and complete information, and express opinions. Is the decision on all forms of director remuneration approved by the shareholders annually? IRPC: Yes (The Board considered all forms of directors’ remuneration including salary, meeting allowance and bonuses for approval of shareholders meeting). In presenting the Board remuneration for shareholders’ approval, did the policy and basis for each director’s remuneration including the pay per position were presented? IRPC: Yes

Does the Company allow shareholders to elect Board members individually? IRPC: Yes

Does the Company disclose in the minutes that it has appointed scrutineers/ inspectors to count and/ or validate the votes at the AGM? IRPC: Yes Is there any opportunity provided to shareholders to propose agenda items, or submit questions before the AGM? IRPC: Yes

Minutes of the Annual General Meeting of Shareholders (AGM) specifies: No other benefits Other benefits (please specify ……………) Minutes of the 2017 AGM page 19-21 Annual Report 2017 page 98 Only the total remuneration amount for the entire Board was disclosed The presentation included policy, details on payment method for director per position, such as salary, and/ or meeting allowance per attendance, and/ or bonuses/ anniual pension. The remuneration specified was per position. Notice of the 2017 AGM page 5-8 Minutes of the 2017 AGM page 19-21 The voting results of individual director were disclosed The voting results of the entire Board were disclosed Minutes of the 2017 AGM page 63 Annual Report 2017 page No Observer Witness Scrutineers Other (please specify)……. Minutes of the 2017 AGM page 2 Annual Report 2017 page 63

• •• •

•• •• •• • • • • • •

Does the Company publicly disclose a policy to encourage and facilitate the Company's shareholders, as well as institutional investors, to attend the AGM? IRPC: Yes

Annual Report 2017 page 60

The rights to: propose meeting agenda in advance of the AGM The rights to submit questions on corporate issues in advance of the AGM SET Website-Please specify the web link to the mentioned information https://www.set.or.th/set/newsdetails.do?newsld= 14742422249221&language=th&country=TH Company Website-Please specify the web link to the mentioned information https://irpc.listedcompany.com/newsroom/ 190920161736090249T.pdf Annual Report 2017 page 60

Annual Report 2017 page 62 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php

217

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No.

Criteria

Information Sources

Quality of the notice to call annual general meeting of shareholders (AGM) A8

A10

A11

Does the Company clearly separate the meeting agenda and each resolution in the AGM deals with only one item? IRPC: Yes On appointment of directors, are the shareholders provided with the candidate’s name and profile? IRPC: Yes

On appointment of the auditor, are the shareholders provided with the name of the auditor, auditing firm, profile or relevant experience, and auditing fees to support their consideration? IRPC: Yes On dividend payment, are company’s dividend policy, dividend amount, and explanation and information disclosed to support shareholders’ consideration? IRPC: Yes

A12

Does the notice of the meeting specify the objectives and reason for each agenda item proposed? IRPC: Yes

A13

Does the notice of the meeting include director's comments and opinion for each agenda item? IRPC: Yes

• • •• • •• • •• • • •• •• •• •• • •

The Board’s resolutions were disclosed on SET Website Notice of the 2017 AGM page 1-10 Annual Report 2017 page 61

1. Name-surname 2. Age 3. Education/ work experiences 4. Number of Board positions in listed and non-listed companies–showing in separate list 5. Nomination criteria and process 6. Types of directors proposed for approval, i.e. director or independent director. 7. For returning director, Information on Board meeting attendance in the past year 8. For returning director, DD/MM/YYYY of first appointment Notice of the 2017 AGM page 4-6/ 16-27 Annual Report 2017 page 62 Name and firm of the auditor The auditor’s experience, ability and independence Auditor’s fees Notice of the 2017 AGM page 8-9 Annual Report 2017 page 62 Dividend policy Dividend payment No dividend payment Supporting explanation and information Accumulated loss Dividend amount proposed Other (please specify) (reason/ tax credit restrictions) Notice of the 2017 AGM page 2-3 Annual Report 2017 page 61 Notice of the 2017 AGM page 2-10 Annual Report 2017 page 61 Notice of the 2017 AGM page 2-10 Annual Report 2017 page 61

Quality of the minutes of the annual general meeting of shareholders A14

Does the voting method and vote counting system declared and recorded? IRPC: Yes

A15

Do the AGM minutes record that there was an opportunity for shareholders to ask questions/ raise issues? Also, is there record of questions and answers? IRPC: Yes Do the AGM minutes clearly record the meeting resolution with voting results for each agenda item, including "for", "against" and “abstain” vote tallies? IRPC: Yes

A16

The voting method and vote counting system were declared before the meeting began. Voting ballot was used Minutes of the 2017 AGM page 3 Annual Report 2017 page 63 Shareholders had the opportunity to ask questions/ raise issues, but none did. Questions and answers were recorded Minutes of the 2017 AGM page 11-26 Annual Report 2017 page 63

•• • •• • • ••

The meeting resolutions were clearly recorded. The resolution specifies "for", "against" and “abstain” tallies and void ballot of each agenda were recorded. Minutes of the 2017 AGM page 1-27 Annual Report 2017 page 64

218

2017 Annual Report IRPC Public Company Limited

No.

Criteria

A17

Is a name list of Board members attending the AGM disclosed in the AGM minutes? IRPC: Yes

â&#x20AC;˘

A18

Does the Company make publicly available by the next working day the results of the votes taken during the AGM for all resolutions? IRPC: The results were make public on the same day after the meeting.

A19

Did the Chairman of the Board attend the AGM? IRPC: Yes. (Mr. Tevin Vongvanich)

SET Website-Please specify the web link to the mentioned information http://www.set.or.th/set/newsdetails.do?newsld= 14912630028001&language=th&country=TH Company Website-Please specify the web link to the mentioned information https://irpc.listedcompany.com/newsroom/ 040420171319220644T.pdf Annual Report 2017 page 64 Minutes of the 2017 AGM page 1 Annual Report 2017 page 63

A20

Did the CEO/ President attend the AGM? IRPC: Yes. (Mr. Sukrit Surabotsopon) Did the Chairman of the Audit Committee attend the AGM? IRPC: Yes. (Mr. Songpope Polachan) Did the Chairman of the Remuneration Committee attend the AGM? IRPC: Yes. (Mr. Woothisarn Tanchai) Did the Chairman of the Nomination Committee attend the AGM? IRPC: Yes. (Mr. Woothisarn Tanchai)

Minutes of the 2017 AGM page 1 Annual Report 2017 page 63

Did the Company organize the most recent AGM in an easily accessible location? IRPC: Yes. (Mr. Woothisarn Tanchai)

Notice of the 2017 AGM page 14-15 Minutes of the 2017 AGM page 1 Annual Report 2017 page 62

A21

A22

A23

A24

Information Sources Minutes of the 2017 AGM page 1 Annual Report 2017 page 64

Minutes of the 2017 AGM page 1 Annual Report 2017 page 63 Minutes of the 2017 AGM page 1 Annual Report 2017 page 63 Minutes of the 2017 AGM page 1 Annual Report 2017 page 63

Does the Companyâ&#x20AC;&#x2122;s shareholder structure indicate any mechanism on anti-takeover defenses? A25 A26 A27

A28

Is cross shareholding apparent? IRPC: No Is pyramid holding apparent? IRPC: No Do Board members hold more than 25% of the outstanding shares? (Bonus) IRPC: No What is the proportion of outstanding shares that are considered "free float"? IRPC: 51.90 (as of March 2, 2017)

Annual Report 2017 page 116 Annual Report 2017 page 116 Annual Report 2017 page 65 Form 56-1 The proportion of free float as of 2018 XM book closing date: Equal to or over 40% Between 15%-39% Less than 15% SET Website-Please specify the web link to the mentioned information https://www.set.or.th/set/companyholder.do?symbol= IRPC&ssoPageId=6&language=th&country=TH

219

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No.

Criteria

A29

Were there additional AGM/ EGM agenda item(s) for shareholders’ approval that were not included in the notice to call the meeting? (Penalty) IRPC: No additional item apart from those specified was included in the notice to call the 2017 AGM.

A30

Did the Company fail or neglect to offer equal treatment for share repurchases to all shareholders? (Penalty) IRPC: No share repurchase

A31

Is there evidence of barriers that prevent shareholders from communicating or consulting with other shareholders? (Penalty) IRPC: No Did the Company fail to disclose the existence of shareholders agreement of essential effect to other shareholders? (Penalty) IRPC: No

A32

Information Sources Additional AGM/ EGM agenda items No additional AGM/ EGM agenda item Notice of the 2017 AGM page 1-10 consists of 7 agenda items: 1) 2 items for acknowledgment 2) 4 items for consideration 3) 1 item for other matters (if any) Minutes of the 2017 AGM page 1-27 Annual Report 2017 page 64 Annual Report 2017 page 65

Annual Report 2017 page 70-71

Equitable Treatment of Shareholders B1 B2

Does the Company offer one-share, one-vote? IRPC: Yes Where the Company has more than one class of shares, does the Company publicize the voting rights attached to each class of shares? IRPC: No Does the Company have any mechanism/ channel to allow minority shareholders to influence the nomination and appointment of director? IRPC: Yes

Has the Company established a system to prevent the use of material inside information and inform all employees, management, and Board members of the system? IRPC: Yes When the Company is involved in connected transactions that require disclosure or shareholders'approval in compliance with SET ‘s regulation, does the Company disclose the details and provide a rationale/ explanation BEFORE conducting such connected transactions? IRPC: Yes Does the Company disclose that the connected transactions are conducted in such a way to ensure that they are fair, based on market prices and at arms’ length? IRPC: Yes

Annual Report 2017 page 64 Articles of Association-Article 34 Common share only Others (please specify) ..…… Annual Report 2017 page 64

Shareholders have the channel to nominate director in advance. Cumulative voting was used SET Website-Please specify the web link to the mentioned information Company Website-Please specify the web link to the mentioned information Annual Report 2017 page 64 Annual Report 2017 page 64 Form 56-1 CG Hanbook page 72

Annual Report 2017 page 70, 142

Annual Report 2017 page 139-142 Form 56-1

220

2017 Annual Report IRPC Public Company Limited

No.

Criteria

Does the Company have an economic- grouping structure with business interconnections which may lead to possible conflicts of interest? IRPC: IRPC and its affilaiates conduct the same businesses as those of PTT Group, connected transactions between IRPC and PTT were inevitable and considered normal business practices. Dores the Company include in the notice of the AGM the proxy form to facilitate voting via proxy? IRPC: Yes

B10

B11

Does the Company post the notice to call the shareholders' meeting at least 30 days in advance on its website? IRPC: 30 days

B13

Does the Company use cumulative voting in the election of Board members? (Bonus) IRPC: No Does the Company also send out the English translation of the notice of shareholdersâ&#x20AC;&#x2122; meetings and supporting documents to foreign shareholders? (Bonus) IRPC: Yes

B15

B16

B17

Annual Report 2017 page 139-142

What kind of Proxy Forms did the Company send to the shareholders/ Proxy Form A Proxy Form B Proxy Form C None Notice of the 2017 AGM 11-13 Annual Report 2017 page 65

Does the notice to shareholders cleary specify the documents required to give proxy? IRPC: Yes Is there any requirement to make it harder for a proxy appointment? IRPC: Yes How many days in advance did the Company send out (by mail) the notice of general shareholder meetings? IRPC: 21 days

B12

B14

Information Sources

Are there any connected transactions that can be classified as financial assistance to non-subsidiarycompanies? (Penalty) IRPC: No Have there been any cases of insider trading involving company directors and/ or management in the past year? (Penalty) IRPC: No Has there been any violation/ non-compliance case regarding connected transaction in the past year? (Penalty) IRPC: No

Notice of the 2017 AGM page 11-13 Annual Report 2017 page 65 Notice of the 2017 AGM page 11-13 Annual Report 2017 page 65

Mailed on March 31, 2017 Date of AGM: April 4, 2017 The notice was mailed 21 days in advance of AGM Annual Report 2017 page 61 SET Website for corporate news/securities - Please specify the web link to the mentioned information http://www.set.or.th/set/newsdetails.do?newsId= 1456783860278 1&language=th&country=TH Date the notice was posted on IRPCâ&#x20AC;&#x2122;s website: March 3, 2017 Date of AGM: April 4, 2017 The notice was posted on website: 30 days in advance of AGM Annual Report 2017 page 61 one-share one-vote Cumulative Voting Minutes of the 2017 AGM page 3

Notice of the 2017 AGM Company Website-Please specify the web link to the mentioned information (Thai) (English) Annual Report 2017 page 65 Annual Report 2017 page 65

Annual Report 2017 page 64-65

Annual Report 2017 page142

221

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No.

Criteria

B18

Has there been any violation/ non-compliance case regarding the buy and sale of companyâ&#x20AC;&#x2122;s asset? (Penalty) IRPC: No Does the Company have a policy requiring directors and key officers to notify the Board at least one day before they deal in the Company shares? (Bonus) IRPC: Directors are required to notify the Board upon the trading

B19

Information Sources Annual Report 2017 page 142

CG Hanbook page 77 Code of Conduct page 15 Annual Report 2017 page 64 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/cg_control_manage.php

The Role of Stakeholders C1

Does the Company have a separate corporate social responsibility (CSR) report? IRPC: Yes

Does the Board formulate a policy and guidelines on the workplace safety and sanitation together with a disclosure of the rates of accidental injury, lost days/ absenteeism, or occupational illness? IRPC: Yes

Does the Board define a policy for the employee's compensation and welfare benefits? IRPC: Yes

Does the Board provide a provident fund for the employees? IRPC: Yes Does the Board formulate a policy and procedures for the employee development program to enhance their knowledge and potential with a disclosure of average training hours per year for the employees? IRPC: Yes

Does the Board formulate a policy preventing human rights violations? IRPC: Yes

CSR report was prepared CSR report was prepared in compliance with GRI framework with GRI Index disclosed Form 56-1 Annual Report 2017 page 186 Sustainability Report 2017 A policy and guidelines on the workplace safety were set. The rates of accidental injury, lost days/ absenteeism, and occupational illness were disclosed. Annual Report 2017 page 205 Form 56-1 CG Hanbook page 81 Code of Conduct page 7 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/goodgovernance.php Annual Report 2017 page 69 Form 56-1 CG Hanbook page 61 Code of Conduct page 4 Sustainability Report 2017 Company Website - Please specify the web link to the mentioned information http://www.irpc.co.th/th/cg_stakeholders.php Annual Report 2017 page 69 Financial Statement and Footnote A policy and procedures for the employeesâ&#x20AC;&#x2122; development was set. The average training hours per year per employees was disclosed. Annual Report 2017 page 68, 167-170 Form 56-1 CG Hanbook page 69 Code of Conduct page 4 Sustainability Report 2017

Annual Report 2017 page 78 Form 56-1 CG Hanbook page 67 Code of Conduct page 4 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/corporate_human_rights.php

222

2017 Annual Report IRPC Public Company Limited

No.

Criteria

Does the Board define a policy and procedures for the treatment of the customers? IRPC: Yes

Does the Board have a policy and procedures for the treatment of the business competitors? IRPC: Yes

Does the Board define a policy and procedures for the treatment of the business partners, particularly on business partner selection? IRPC: Yes

C10

Does the Board formulate a policy and procedures for the treatment of the creditors, particularly on guarantee / collateral conditions, capital management, and default? IRPC: Yes

C11

Does the Board set a policy preventing violations of the software copyright and intellectual property? IRPC: Yes

C12

Does the Board have a policy against corruption and a preventive measure for commercial bribery? IRPC: Yes

Information Sources

Annual Report 2017 page 66 Form 56-1 CG Hanbook page 59 Code of Conduct page 24 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/cg_stakeholders.php

Annual Report 2017 page 67 Form 56-1 CG Hanbook page 60 Code of Conduct page 27 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/cg_stakeholders.php The Company has a policy and procedures for the treatment of the business partners. Procedures for partner selection are disclosed in details. Annual Report 2017 page 67 Form 56-1 CG Hanbook page 60 Code of Conduct page 27 Sustainability Report 2017 Company Website - Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/CG/policy/Procurement Manual.pdf The Company has a policy and procedures for the treatment of the creditors which include: Guarantee terms and conditions Capital management Default Annual Report 2017 page 67 Form 56-1 CG Hanbook page 60 Code of Conduct page 27 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/cg_stakeholders.php Annual Report 2017 page 69 Form 56-1 CG Hanbook page 79 Code of Conduct page 21 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/ library/09/Corporate%20Governance_th.pdf

223

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No.

Criteria

C13

Does the Company have a corruption risk assessment procedure in place to determine the extent of the risk of corruption to the business? IRPC: Yes

C14

Does the Company define internal compliance and control guidelines to prevent and monitor corruption risk? IRPC: Yes

C15

Does the Company have the procedures to monitor and enforce the anti-corruption policy? IRPC: Yes

C16

Has the Company been educating its employees on its anti-corruption policy and procedures? IRPC: Yes (IRPC held its own training and sent its employees to attend training arranged by other organizations, such as IOD)

C17

Does the Board have a policy for the community services? IRPC: Yes

C18

Does the Board organize social activities or take part in the community development program? IRPC: Yes

Information Sources

Annual Report 2017 page 77 Form 56-1 CG Hanbook page 36-46 Code of Conduct page 9 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/library/09/Corporate%20 Governance_th.pdf Annual Report 2017 page 77 Form 56-1 CG Hanbook page 36-46 Code of Conduct page 9 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/library/09/Corporate%20 Governance_th.pdf Annual Report 2017 page 77 Form 56-1 CG Hanbook page 36-46 Code of Conduct page 4 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/library/09/Corporate%20 Governance_th.pdf Annual Report 2017 page 69 Form 56-1 CG Hanbook page 62 Code of Conduct page 7 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/sustainable.php Annual Report 2017 page 69 Form 56-1 CG Hanbook page 62 Code of Conduct page 7 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/sustainable.php

224

2017 Annual Report IRPC Public Company Limited

No.

Criteria

Information Sources

C19

Does the Board have a business operations policy conforming to environmental standards? IRPC: Yes

C20

the Board encourage the utilization of the Does resources efficiently?

ISO14000, 14001 Green Label Other (please specify) …………………… Annual Report 2017 page 70 Form 56-1 CG Hanbook page 81 Code of Conduct page 7 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/sustainable.php Annual Report 2017 page 70 Form 56-1 CG Hanbook page 83 Code of Conduct page 7 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/cg_control.php Annual Report 2017 page 206 Form 56-1 CG Hanbook page 69 Code of Conduct page 7 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/sustainable.php Annual Report 2017 page 77 Form 56-1 CG Hanbook page 45 Code of Conduct page 18 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/ library/09/Corporate%20Governance _th.pdf Annual Report 2017 page 78 Form 56-1 CG Hanbook page 45 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/ library/09/Corporate%20Governance_th.pdf Annual Report 2017 page 77-78 Form 56-1 CG Hanbook page 46 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/library/09/Corporate%20 Governance_th.pdf Annual Report 2017 page 77 Form 56-1 CG Hanbook page 45 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/library/09/Corporate%20 Governance_th.pdf

IRPC: Yes

C21

the Board have a training program to educate Does the employees about the environmental issues? IRPC: Yes

C22

C23

Does the Board provide direct channel for stakeholders to communicate/ complaint any concerns to the Board? IRPC: Yes

the Company have procedures for complaints Does by employees concerning illegal or unethical behavior? IRPC: Yes

C24

C25

Does the company have a policy or procedures to protect an employee/ person who reveals illegal/ unethical behavior from retaliation? IRPC: Yes

the Company provide clear contact details which Does stakeholders can use to voice their concerns and/ or complaints for possible violation of their rights? IRPC: Yes

225

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No. C26

Criteria

Information Sources

the Company have a reward/ compensation Does policy that accounts for the performance of the company both in short-term and long-term financial measures? IRPC: Yes

C27

C28

C29

Have there been any violations of any laws pertaining to labor, employment, consumer, commercial competition or environmental issues? (Penalty) IRPC: No Has the Company faced any sanctions by the regulators for failure to make an announcement within the requisite time period for material events? (Penalty) IRPC: No Does the Company prepare an integrated report? (Bonus) IRPC: Yes (In 2015, 2016, and 2017)

Balanced Scorecard ESOP EJIP Other (please specify) Annual Report 2017 page 69 Form 56-1 CG Hanbook page 70 Code of Conduct page 4 Sustainability Report 2017 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ pdf/library/09/Corporate%20Governance_th.pdf Annual Report 2017 page 107-109

Annual Report 2017 page 107

Annual Report 2017 page 70 Sustainability Report (CSR Report) http://www.irpc.co.th/th/pdf/library/13/AW_IRPC%20 IR%202015_TH%20for%20IRPC_HI.pdf

Disclosure and Transparency Does the Company have a transparent shareholder structure? D1

Is there a breakdown of the shareholding structure? IRPC: Yes

Is it easy to identify beneficial shareholder? IRPC: Yes

the Company disclose the direct and indirect Does shareholdings of directors? IRPC: Yes

the Company disclose the direct and indirect Does shareholdings of senior management? IRPC: Yes

Annual Report 2017 page 113, 116 Form 56-1 SET Website-Please specify the web link to the mentioned information http://www.set.or.th/set/companyholder.do?symbol= IRPC&ssoP ageId=6&language=th&country=TH Annual Report 2017 page 113, 116 Form 56-1 SET Website-Please specify the web link to the mentioned information http://www.set.or.th/set/companyholder.do?symbol= IRPC&ssoP ageId=6&language=th&country=TH The Company disclose only direct or unseparated direct and indirect shareholdings of directors The Company disclose separated direct and indirect shareholdings of directors Annual Report 2017 page 104-105 Form 56-1 The Company disclose only direct or unseparated direct and indirect shareholdings of directors The Company disclose separated direct and indirect shareholdings of directors Annual Report 2017 page 106-207 Form 56-1

226

2017 Annual Report IRPC Public Company Limited

No.

Criteria

Information Sources

Please assess the quality of the annual report in the following D.05-D.21: D5

the annual report contain a statement confirming Does the Company’s full compliance with the code of corporate governance and where there is noncompliance, identify and explain reasons for each such issue? IRPC: Yes Corporate objectives/ Long Term Goal IRPC: Yes Financial status and performance IRPC: Yes Non-financial performance indicators, for example, market share, customer’s satisfaction level, etc. IRPC: Yes Business operations and competitive position IRPC: Yes Corporate group structure (if any) IRPC: Yes Key risks in business operation IRPC: Yes Dividend policy IRPC: Yes Details of whistle-blowing policy IRPC: Yes Board member background IRPC: Yes

D10

D11

D12

D13

D14

D15

Identification of independent directors

D16

D17

D18

D19

D20

D21

IRPC: Yes Basis of the Board remuneration IRPC: Yes Basis of the key executives’ remuneration IRPC: Yes Disclosure of individual directors' remuneration IRPC: Yes Number of Board of directors’ meetings held during the year IRPC: Yes Board meeting attendance of individual directors IRPC: Yes Training and continuing education programs attended by each director in the last year. IRPC: Yes

The SET’s code of corporate governance is fully complied with. The reasons for each identified non-compliance with SET’s code of corporate governance were disclosed. Annual Report 2017 page 56-78 Annual Report 2017 page 18 Annual Report 2017 page 4-5, 146-163, 171-184 Percentage of market share Percentage of customer’s satisfaction Annual Report 2017 page 122-127, 128-137 Annual Report 2017 page 117-127 Annual Report 2017 page 116 Annual Report 2017 page 47-49 Annual Report 2017 page 76 Annual Report 2017 page 77

Annual Report 2017 page 22-33 Name-Surname Age Position Educational backfround Experience Shareholding percentage Date/ month/ year of appointment as director Directorship in other listed company, listed company and other company must be clearly separated Annual Report 2017 page 20-33 Annual Report 2017 page 98 Annual Report 2017 page100-101 Annual Report 2017 page 99-100 Annual Report 2017 page 94

Annual Report 2017 page 94 None participated in any development or ttraining in the past year. Information on the development or ttraining of each director in the past year was disclosed. Annual Report 2017 page 22-33, 74-75

227

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No. D22

Criteria the Company fully disclose details of its connect Does ed transactions?

IRPC: Yes D23 the Company have a specific policy requiring Does directors to report their shareholding and transactions of company shares to the Board of directors? IRPC: Yes D24 the Company disclose in the annual report the Does change in shareholding of the directors and the executives, i.e. share held at the beginning and end of the year, and trading during the year? IRPC: Yes D25 the Company have a policy requiring directors Does to report possible conflicts of interest? IRPC: Yes D26

the Company disclose its policy covering the Does review and approval of material/ significant connected

transactions by the Board of directors? IRPC: Yes D27 the Company perform an annual audit using Does independent and reputable auditors? IRPC: Yes D28 Are audit fees disclosed in the annual report? IRPC: Yes D29 Are the non-audit fees disclosed in the annual report? IRPC: Yes D30

the auditor endorse the Companyâ&#x20AC;&#x2122;s financial Does statements with conditions?

IRPC: No D31 the annual report released within 120 days from the Isfinancial year end? IRPC: Yes

Information Sources Annual Report 2017 page Financial Statement and Footnote page 139-142

Annual Report 2017 page 64 Form 56-1 CG Hanbook page 77 Code of Conduct page 12

Annual Report 2017 page 64

Annual Report 2017 page 64-65 Form 56-1 CG Hanbook page 27 Code of Conduct page 12 Annual Report 2017 page 65, 139-142 Form 56-1 CG Hanbook page 27 Code of Conduct page 12

Annual Report 2017 page 76 Auditor: Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd. Annual Report 2017 page 76 Audit fees: 4,000,000 Baht (four million Baht only) Annual Report 2017 page Non-audit fees : 9,008,830 Baht (nine million eight thousand eight hundred and thirty baht) Annual Report 2017 page 52-53 Financial statement

Release date of Annual Report 2017 SET Website Company Website Annual Report 2017 page 71

Does the Company offer multiple channels of access to information? Multiple channels include (32)â&#x20AC;&#x201C;(36): D32

Annual report

IRPC: Yes D33 Quarterly reports IRPC: Yes

D34

Company website IRPC: Yes

Annual Report 2017 SET Website-Please specify the web link to the mentioned information http://www.set.or.th/set/companyprofile.do?symbol=IRP C&ssoPageId=4&language=th&country=TH Company Website- Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php Annual Report 2017 page 52-53 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/index.php?intro=1

228

2017 Annual Report IRPC Public Company Limited

No. D35

Criteria Analyst briefing(s)/ Opportunity Day

A total of 4 Analyst Meetings Attended 4 Opportunity Day events. Annual Report 2017 page 71 Form 56-1 Company Website Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php

conference(s)/ press briefing(s) on the Companyâ&#x20AC;&#x2122;s Press financial status?

A total of 7 press conferences on corporate performance were held. A total of 4 Newsletter on corporate performance were issued. Annual Report 2017 page 71 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php Annual Report 2017 page 142

IRPC: Yes

D36

IRPC: Yes

D37

Information Sources

Was the financial report disclosed in an untimely manner

during the past year?

IRPC: No

Does the Company have a website disclosing the following up-to-date information? D38

IRPC: Yes

D39

Financial statements IRPC: Yes

D40

Press releases IRPC: Yes

D41

Shareholding structure IRPC: Yes

D42

Organization structure IRPC: Yes

D43

Corporate group structure (If any) IRPC: Yes

D44

Information on the Board of directors and management IRPC: Yes

D45

Information on the investor relations IRPC: Yes

D46

Company's Articles of Association IRPC: Yes

D47

Business operations

Downloadable annual report IRPC: Yes

Company Website-Please specify the web link to the information http://www.irpc.co.th/th/ir_home_th.php Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/cg_shareholder.php Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_organiz.php Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php Company Website-Please specify the web link to the mentioned information The Board: http://www.irpc.co.th/th/about_Board.php The management: http://www.irpc.co.th/th/about_management.php Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/CG/Articles%20of%20 Association_280458_TH.pdf Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php

229

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No. D48

Criteria

Information Sources

Downloadable notice to call the AGM IRPC: Yes

D49

Downloadable minutes of the AGM IRPC: Yes

D50

Website in both Thai and English IRPC: Yes

D51

the Company provide contact details for a specific Does Investor Relations person or unit that is easily accessible to outside investors? IRPC: Yes

D52

Company Website-Please specify the web link to the mentioned information http://irpc.listedcompany.com/newsroom/ 010320161809390811T.pdf Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php A specific Investor Relations unit was set up A specific Investor Relations person was appointed Contact channel Tel. Email Fax. Other (Please specify) Annual Report 2017 page 71 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/ir_home_th.php

there any record of sanctions by the SEC requiring Was the company to revise its financial statements during the

past year? (Penalty) IRPC: No D53 the company disclose the details of the CEO Does compensation? (Bonus) IRPC: Yes

Annual Report 2017 page 100-101

Board Responsibilities E1

IRPC: Yes

the Board of directors provide a code of ethics and/ Does or code of business conduct for its directors, senior

management and employees, and disclose all details in the annual report or companyâ&#x20AC;&#x2122;s website? IRPC: Yes

the Company disclose that all directors, senior Does management and employees are required to comply with the code? IRPC: Yes

the Board of directors have the Company's own Does written corporate governance policy?

the Company disclose how it implements and Does monitors compliance with the code of ethics or code of business conduct? IRPC: Yes

Annual Report 2017 page 56-60 Form 56-1 CG Hanbook page 7 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/library/09/Corporate%20 Governance_th.pdf Annual Report 2017 page 56-60 Form 56-1 CG Hanbook page 48 Code of Conduct page 2 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/library/09/Code_of_Conduct.pdf Annual Report 2017 page 56-60 Form 56-1 CG Hanbook page 48 Code of Conduct page 3 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/library/09/Code_of_Conduct.pdf Annual Report 2017 page 56-60 Form 56-1 CG Hanbook page 48 Code of Conduct page 2 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/pdf/library/09/Code_of_Conduct.pdf

230

2017 Annual Report IRPC Public Company Limited

No. E5

the Board of directors have a corporate vision/ Does mission? IRPC: Yes

the Board of directors reviewed the vision, mission, Has and strategy in the last financial year? IRPC: Yes Does the Board of directors monitor the implementation of the corporate strategy? IRPC: Yes Does the Board of directors state in the Company’s corporate governance policy that limits five Board seats in publicly-listed companies that a director can hold? IRPC: Yes Does the Board of directors state in the Company’s corporate governance policy that limits three Board seats in publicly listed companies that a director can hold? (Bonus) IRPC: The policy on directorship in listed companies that each director can hold is limited to up to 5 Does the Board of directors state a policy that addresses the Board positions in other firms held by the Company’s CEO/ President? IRPC: Yes Does the Board of directors have a term limit of nine years for independent directors? IRPC: Yes Does the Board of directors have a term limit of six years or less for independent directors? (Bonus) IRPC: The term is limited to up to 9 years Does the Company have any independent directors who have served for more than nine years? (Penalty) IRPC: No

E10

E11

E12

E13

E14

the company fail to disclose the identity of the Did independent directors? (Penalty)

IRPC: No E15

any of the director or senior management a former Isemployee or partner of the current external auditor (in the past 2 years)? (Penalty) IRPC: No

E16

Criteria

the Company have any independent directors Does who serve on more than five Boards of publicly-listed companies? IRPC: No

Information Sources Annual Report 2017 page 86, 18 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_vision.php Annual Report 2017 page 86 Form 56-1 Annual Report 2017 page 86 Form 56-1 CG Hanbook page 20 Annual Report 2017 page 83 Form 56-1 CG Hanbook page 18 Annual Report 2017 page 83 CG Hanbook page 18

Annual Report 2017 page 83 Form 56-1 CG Hanbook page 21 Annual Report 2017 page 83 Form 56-1 CG Hanbook page 18 Annual Report 2017 page 83 Form 56-1 CG Hanbook page 18

No Yes Number..........director (s) Annual Report 2017 page 83 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_Board.php Annual Report 2017 page 83, 22, 104-106 Form 56-1 Company Websiteb-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_Board.php No Yes Number...............director(s) Annual Report 2017 page 20-46 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_management.php No Yes Number.............director (s) Annual Report 2017 page 20-33 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_Board.php

231

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No. E17

Criteria the Company have any executive directors who Does serve on more than two Boards of publicly-listed companies outside of the business group? IRPC: No

E18

at least one non-executive director have prior Does working experience in the major industry the Company

is operating in? IRPC: Yes (Mr. Tevin Vongvanich, Mr. Chansin Treenuchagron, Mr. Chavalit Punthong, Mr. Nutthachat Charuchinda, Dr. Anusorn Sangnimnuan, Mr. Somnuk Bomrungsalee, and Mr. Kris Imsang) E19 the SET/ SEC have any evidence of non-compliance Does with SET/ SEC rules and regulations during the past year? IRPC: No E20 Does the Company have a compliance unit? (Bonus) IRPC: Yes E21

the Board of directors have an internal audit Does operation established as a separate unit in the Company? IRPC : Yes

E22

an internal audit was established, does it report Ifdirectly to the Audit Committee? IRPC: Yes (The Office of Corporate Internal Audit reports directly to the Audit Committee)

E23

head of internal audit identified or, if outsourced, Isis the the name of the external firm disclosed? IRPC: Yes (Head of The Office of Corporate Internal Audit: Mr. Thammasak Panyowatkool)

Information Sources

No Yes Number...............director (s) Annual Report 2017 page 22-33 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_Board.php No Yes Number 7 directors Annual Report 2017 page 22-32 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_Board.php

Annual Report 2017 page 107-109 Form 56-1 An internal audit unit was set up An external firm was hired to be the auditor Annual Report 2017 page 34 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_organiz.php Annual Report 2017 page 34, 88 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_organiz.php Annual Report 2017 page 44, 88 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_management.php

Assessment of the Quality of the Audit Committee Report E24

of meeting attendance of the Board of Disclosure directors during the year

IRPC: Yes A total of 11 meetings were held. E25 Internal control assessment and review IRPC: Yes E26 Connected transactions IRPC: Yes E27

Annual Report 2017 page 88, 52-53 Annual Report 2017 page 88, 52-53

Proposed auditor appointment

Annual Report 2017 page 88, 52-53

Financial report review

Annual Report 2017 page 88, 52-53

Legal compliance

Annual Report 2017 page 88, 52-53

IRPC: Yes

E28

IRPC: Yes

E29

Annual Report 2017 page 94

IRPC: Yes

232

2017 Annual Report IRPC Public Company Limited

No. E30

Criteria Overall concluding opinion

Annual Report 2017 page 88, 52-53

the Company disclose the Board of directorsâ&#x20AC;&#x2122; Does diversity policy, such as professional skills, specific

Annual Report 2017 page 89-90 Form 56-1 CG Hanbook page 18

IRPC: Yes

E31

experiences, or gender, etc? IRPC: Yes E32 the Company disclose the criteria used in selecting Does new directors? IRPC: Yes E33 the Company disclose the process followed in Does appointing new directors? IRPC: Yes E34

the Nomination Committee undertake the process Does of identifying the quality of directors that aligned with

E35

E36

E37

E38

E39

the Companyâ&#x20AC;&#x2122;s strategic directions? (Bonus) IRPC: Yes Does the Company use professional search firms or director pool when searching for candidates to the Board of directors? (Bonus) IRPC: Yes (The Director Pool was used each time) Does the Company provide an orientation to new directors? IRPC: Yes Does the Board of directors have a policy that encourages directors to attend on-going or continuous professional education programs? IRPC: Yes Have Board members participated in the professional/ accredited directors' training? IRPC: Yes

the Board of directors encourage directors to Does regularly attend the continuing development programs or seminars? IRPC: Yes

E40

How many Board meetings were held in the past year? IRPC: 12 meetings

E41

Information Sources

is the attendance performance of the Board What members during the past 12 months?

IRPC: The Board attendance is 80% and individual attendance is over 75%) E42 the Company require a minimum quorum of at least Does 2/3 for Board decisions? IRPC: Yes

Annual Report 2017 page 89-90 Form 56-1 CG Hanbook page 18 Annual Report 2017 page 89-90

Form 56-1 CG Hanbook page 18 Annual Report 2017 page 89-90 Form 56-1 CG Hanbook page 18

Annual Report 2017 page 89-91 Form 56-1

Annual Report 2017 page 74 Form 56-1 CG Hanbook page 19 Annual Report 2017 page 74-75 Form 56-1 CG Hanbook page 49 Annual Report 2017 page 74-75 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_Board.php Annual Report 2017 page 74-75 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_Board.php A total of 12 Board meetings were held. Annual Report 2017 page 94 Form 56-1 Annual Report 2017 page 93-94 Form 56-1

Annual Report 2017 page 93-94 Form 56-1 CG Hanbook page 23-24

233

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No. E43

the Board of directorsâ&#x20AC;&#x2122; meetings scheduled in Are advance throughout the year? IRPC: Yes Have all directors attended at least 75% of all the Board meetings held during the year? IRPC: Yes (over xx %) Are Board papers for the Board of directorsâ&#x20AC;&#x2122; meetings provided to the Board at least five business days in advance of the Board meeting? IRPC: xx days in advance of the Board meeting. Are there any meetings of non-executive directors in the absence of the management? IRPC: A total of xxx non-executive directors meetings were held Does the Board of directors provide a risk management policy? IRPC: Yes Does the Board disclose the internal control and risk management systems it has in place? IRPC: Yes Does the annual report disclose that the Board of directors has conducted a review of the Company's interial controls and risk management systems? IRPC: Yes Does the annual report contain a statement from the Audit Committee commenting on the adequacy of the company's internal controls and risk management systems? (Bonus) IRPC: Yes Does the Company disclose how key risks are managed? IRPC: Yes Does the Board of directors state a policy on conflicts of interest? IRPC: Yes

E44

E45

E46

E47

E48

E49

E50

E51

E52

E53

the Board of directors clearly distinguish the roles Does and responsibilities of the Board and those of the

management? IRPC: Yes

E54

Criteria

the decisions requiring Board of directors' approval Are disclosed?

IRPC: Yes E55 the Board of directors conduct an annual Does self-assessment? IRPC: Yes

Information Sources Annual Report 2017 page 93 Form 56-1 CG Hanbook page 23 Annual Report 2017 page 93 Form 56-1 Annual Report 2017 page 93 Form 56-1 CG Hanbook page 23 No Yes. A total of 1 non-executive directors meetings were held, Annual Report 2017 page 93-94 Form 56-1 Annual Report 2017 page 92-93 Form 56-1 CG Hanbook page 30 Annual Report 2017 page 92-93 Form 56-1 Annual Report 2017 page 47-49, 92-93

Annual Report 2017 page 52-53

Annual Report 2017 page 50-53 Form 56-1 Annual Report 2017 page 65 Form 56-1 CG Hanbook page 74 Code of Conduct page 12 The Board distinguishes the role and responsibilities of: The Board The management CEO Annual Report 2017 page 95 Form 56-1 CG Hanbook page 39 Annual Report 2017 page 87 Form 56-1 CG Hanbook page 20 Annual Report 2017 page 72-74 Form 56-1

234

2017 Annual Report IRPC Public Company Limited

No. E56

the Company disclose the process followed Does in conducting the assessment of the entire Board?

E57

E58

E59

E60

IRPC: Yes Does the Company disclose the criteria used in the assessment of the entire Board? IRPC: Yes Is an annual performance assessment conducted of individual director? IRPC: Yes Does the Company disclose the process followed in conducting the individual director assessment? IRPC: Yes Does the Board of directors disclose the criteria used in the individual director assessment? IRPC: Yes Is an annual performance assessment conducted of all Sub-committees? IRPC: Yes

E61

E62

the Board of Directors conduct an annual performance Does assessment of the No. 1 Management (CEO)?

IRPC: Yes Does the Board of directors have a CEO succession plan in place? IRPC: Yes Does the Company disclose its remuneration policy both short-term and long-term incentives and performance measures for its CEO? IRPC: Yes Is there disclosure of the fee structure for non -executive directors? IRPC: Yes Do the shareholders/ the Board of directors approve the remuneration of the executive director/ the senior executives)? IRPC: Yes Does the Board of directors appoint a company secretary? IRPC: Yes

E63

E64

E65

E66

E67

E68

Company secretary educated or trained in legal Isor the accountancy or company secretarial practices?

Criteria

IRPC: The Company Secretary has training related to secretarial practices

Information Sources Annual Report 2017 page 71-74 Form 56-1 Annual Report 2017 page 71-74 Form 56-1 Annual Report 2017 page 72-73 Form 56-1 Annual Report 2017 page 72-73 Form 56-1 Annual Report 2017 page 72-73 Form 56-1 IRPC has 4 Sub-committees (Board level) 1. Nomination and Remuneration Committee 2. Audit Committee 3. Risk Management Committee 4. Corporate Governance Committee Annual Report 2017 page 73-74 Form 56-1 Annual Report 2017 page 74 Form 56-1 Annual Report 2017 page 75 Form 56-1 Annual Report 2017 page Form 56-1 CG Hanbook page 25-26 Annual Report 2017 page 99 Form 56-1 Annual Report 2017 page 99 Form 56-1

Annual Report 2017 page 98 Form 97 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_management.php#nogo Graduated in Accountancy Laws Courses trained CSP FPCS/ FCS Annual Report 2017 page 56 Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_management.php#nogo

235

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No. E69

Criteria

Information Sources

Is the chairman of the Board an independent director?

IRPC: No. The Chairman was appointed due to his knowledge, experience, and competency in the petroleum and petrochemical fields. (Chairman : Mr. Tevin Vongvanich) E70 Is the chairman of the Board also the CEO/ President? IRPC: No (President: Mr. Sukrit Surabotsopon)

E71

the Board define and disclose the role and Does responsibilities of the chairman of the Board? IRPC: Yes

Annual Report 2017 page Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_Board.php#nogo Annual Report 2017 page Form 56-1 Company Website-Please specify the web link to the mentioned information http://www.irpc.co.th/th/about_Board.php#nogo Annual Report 2017 page Form 56-1 CG Hanbook page 24

Appointment of the Audit Committee E72

Does the Board of directors appoint the Audit Committee?

Annual Report 2017 page Form 56-1

the duties and responsibilities of the Audit Are Committee clearly stated?

Annual Report 2017 page Form 56-1

IRPC: Yes

E73

E74

E75

E76

E77

E78

E79

E80

IRPC: Yes Does the profile and qualifications of the members of the Audit Committee publicly disclosed? IRPC: Yes Are all members of the Audit Committee independent directors? IRPC: Yes Did the Audit Committee meet at least four times during the year? IRPC: The Audit Committee held a total of xx meetings. Is the attendance of each member at the Audit Committee meetings disclosed in the annual report? IRPC: Yes Does at least one of the independent directors of the Audit Committee have accounting qualification? IRPC: Yes (Mr. Jessada Promjart) Does the Audit Committee have a primary responsibility for recommendation on the appointment and removal of the external auditor? IRPC: Yes Does the Audit Committee have a primary responsibility for recommendation on the appointment, transfer and removal of the internal auditor? IRPC: Yes

Annual Report 2017 page Form 56-1 Annual Report 2017 page Form 56-1 Annual Report 2017 page Form 56-1 Annual Report 2017 page Form 56-1 Annual Report 2017 page Form 56-1 Annual Report 2017 page Form 56-1

Annual Report 2017 page Form 56-1

Appointment of the Remuneration Committee E81

the Board of directors appoint the Remuneration Does Committee? IRPC: Yes

Annual Report 2017 page Form 56-1

236

2017 Annual Report IRPC Public Company Limited

No. E82

Criteria the duties and responsibilities of the Remuneration Are Committee clearly stated?

IRPC: Yes E83 the Committee composed of a majority of independent Isdirectors (over 50%)? IRPC: No E84

the Chairman of the Committee an independent Isdirector?

IRPC: Yes E85 the Remuneration Committee meet at least twice Did during the year? IRPC: The Remuneration Committee held a total of xx meetings. E86 the attendance of each member at Remuneration IsCommittee meetings disclosed in the annual report? IRPC: Yes

Information Sources Annual Report 2017 page 89-90 Form 56-1 Annual Report 2017 page 89 Form 56-1 The Committee has 3 members, one (33.33%) of whom is an independent director. Annual Report 2017 page 23, 89 Form 56-1 Annual Report 2017 page 94 Form 56-1

Annual Report 2017 page 94 Form 56-1

Appointment of the Nomination Committee E87

the Board of directors appoint the Nomination Does Committee?

IRPC: Yes E88 the duties and responsibilities of the Committee Are clearly stated? IRPC: Yes E89 the Nomination Committee comprise entirely of Does independent directors? (Bonus) IRPC: No E90 the Nomination Committee composed of a majority of Isindependent directors (over 50%)? IRPC: No E91

E92

E93

E94

E95

the Chairman of the Nomination Committee an Isindependent director? IRPC: Yes Did the Nomination Committee meet at least twice during the year? IRPC: The Nomination Committee held a total of xx meetings. Is the number of meetings and member attendance at the Nomination Committee meetings disclosed? IRPC: Yes Does the Board of directors appoint the Corporate Governance Committee (at the Board level only)? IRPC: Yes Does the Board of directors appoint the Risk Management Committee? IRPC: Yes

Annual Report 2017 page 89 Form 56-1 Annual Report 2017 page 89-90 Form 56-1 Annual Report 2017 page 89 Form 56-1 Annual Report 2017 page 89 Form 56-1 The Nomination Committee has 3 members, one (33.33%) of whom is an independent director Annual Report 2017 page 23, 89 Form 56-1 Annual Report 2017 page 94 Form 56-1

Annual Report 2017 page 94 Form 56-1 Annual Report 2017 page Form 56-1 Annual Report 2017 page Form 56-1

237

Corporate Governance Report of Thai Listed Companies (CGR) 2017

No.

Criteria

E96

Does the Board of directors comprise of at least five members and no more than 12 members? IRPC: No Does the Company have at least one female independent director? (Bonus) IRPC: Yes (Ms. Ruenvadee Suwanmongkol) How many Board members are non - executive directors? IRPC: 14 (out of 15 members, or 93.33%)

E97

E98

E99

E 100

E 101

E 102

E 103

E 104

E 105

E 106

E 107

E 108

Among the Board of directors, how many are independent directors? IRPC: 7 (out of 15 members, or 46.67%) Does the Board of directors provide the definition of 'independence' for identifying independent directors in public communications? IRPC: Yes Are the independent directors independent of the management and major shareholders? IRPC: Yes Does the annual report contain a separate Board of directors’ report describing their responsibilities in reviewing the Company’s financial statements? IRPC: Yes Does the Company provide an employee stock options scheme with (1) the exercise period over 3 years (2) the strike price above the market price at the time of the award, and (3) no concentration such that no particular individual received more than 5% of the award? (Bonus/ Penalty) IRPC: No Did the Company sign the declaration of the Private Sector Collective Action Coalition Against Corruption? (Bonus) IRPC: Yes Did the Company publish the Board Committee Report for each Board Committee (only at the Board level) in the Company’s annual report? (Bonus) IRPC: Yes Has the Company had any non-compliance cases regarding fraud/ ethics in the past year? (Penalty) IRPC: No Have there been any instances where non-executive directors have resigned and raised any issues of governance-related concerns? (Penalty) IRPC: No Have there been major corporate scandals that point to weak oversight by the Board of directors? (Penalty) IRPC: No

Information Sources Annual Report 2017 page 82 Form 56-1 The Board comprises of 15 members Annual Report 2017 page 27-83 Form 56-1 The Board has 1 female independent director

Annual Report 2017 page 82 Form 56-1 The Board has 14 non-executive directors Annual Report 2017 page 92 Form 56-1 The Board has 7 independent directors.

Annual Report 2017 page 84 Form 56-1

Annual Report 2017 page 87 Form 56-1 FInance Annual Report 2017 page 84 Form 56-1

At the 2015-2017 AGM/ EGMr Approved ESOP EJIP Annual Report 2017 page 87 Form 56-1 SET Website/ SETSMART

Annual Report 2017 88-92 Form 56-1

Annual Report 2017 page 107

warrant

238

2017 Annual Report IRPC Public Company Limited

Compliance with the Social Responsibility Criteria (2018) Compliance with the Social Responsibility Criteria (2018)

Page

IRPC's Corporate Governance Committee is in place.

158-159 186-204 81, 91

IRPC discloses the total compensation of the management.

100-101

IRPC’s business is conducted in parallel with its stewardship of society and the environment under good governance principles and corporate governance to lead it to business sustainability.

IRPC discloses the audit fees paid to its external auditor.

Financial Statement 76

IRPC commands a policy on and strategies for risks and risk management.

160-163

IRPC discloses the total compensation of employees.

IRPC’s anti-corruption policy is in place. IRPC’s whistleblowing guidelines are in place.

77 77-78

IRPC enables stakeholders to report to responsible persons/ units.

IRPC participates as a member or associate of an anti-corruption body.

IRPC’s vision/ policy promoting business and social innovations is in place. IRPC improves and extends ideas/ goods or work processes into business and social innovations.

153 150, 154

IRPC’s sustainability management policy is in place.

213

IRPC’s environmental management and care policy is in place.

205

IRPC promotes effective and sustainable consumption of resources.

208, 211

IRPC prevents and reduces pollutants/ waste.

209-210

IRPC reduces greenhouse gas emissions.

209

IRPC’s social responsibility policy is in place.

186-191

IRPC respects human rights and treats labor fairly.

188-189

IRPC’s intention is clear about respecting human rights. IRPC’s personnel capability development project is in place. IRPC supports and aids community self-reliance efforts. IRPC identifies key stakeholder groups. IRPC engages stakeholders in its efforts. IRPC prepares a report on disclosure of social and environmental work.

78, 188-189 157-158 214-215 168-170 199 65-70 65-70, 214 190-212